82 FR 8994 - Disturbance Control Standard-Contingency Reserve for Recovery From a Balancing Contingency Event Reliability Standard
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission Federal Register Volume 82, Issue 21 (February 2, 2017)
Federal Energy Regulatory Commission
Federal Register Volume 82, Issue 21 (February 2, 2017)
| Page Range | 8994-9004 | |
| FR Document | 2017-02175 |
[Federal Register Volume 82, Number 21 (Thursday, February 2, 2017)] [Rules and Regulations] [Pages 8994-9004] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-02175] ----------------------------------------------------------------------- DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 40 [Docket No. RM16-7-000; Order No. 835] Disturbance Control Standard--Contingency Reserve for Recovery From a Balancing Contingency Event Reliability Standard AGENCY: Federal Energy Regulatory Commission, Department of Energy. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Commission approves Reliability Standard BAL-002-2 (Disturbance Control Standard--Contingency Reserve for Recovery from a Balancing Contingency Event) submitted by the North American Electric Reliability Corporation (NERC). Reliability Standard BAL-002-2 is designed to ensure that balancing authorities and reserve sharing groups balance resources and demand and return their Area Control Error to defined values following a Reportable Balancing Contingency Event. In addition, the Commission directs NERC to develop modifications to Reliability Standard BAL-002-2 to address concerns regarding extensions of the 15-minute period for Area Control Error recovery and contingency reserve restoration. The Commission also directs NERC to collect and report on data regarding additional megawatt losses following Reportable Balancing Contingency Events during the Contingency Reserve Restoration Period and to study and report on the reliability risks associated with megawatt losses above the most severe single contingency that do not cause energy emergencies. DATES: This rule is effective April 3, 2017. FOR FURTHER INFORMATION CONTACT: Enakpodia Agbedia (Technical Information), Office of Electric Reliability, Division of Reliability Standards, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-6750, [email protected]. Mark Bennett (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-8524, [email protected]. SUPPLEMENTARY INFORMATION: ORDER NO. 835 FINAL RULE (Issued January 19, 2017) 1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the Commission approves Reliability Standard BAL-002-2 (Disturbance Control Standard--Contingency Reserve for Recovery from a Balancing Contingency Event). The North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO), developed and submitted Reliability Standard BAL-002-2 for Commission approval. Reliability Standard BAL-002-2 is intended to ensure that balancing authorities and reserve sharing groups are able to recover from system contingencies by deploying adequate reserves to return their Area Control Error (ACE) to defined values and by replacing the capacity and energy lost due to generation or transmission equipment outages.\2\ In addition, the Commission approves eight new and revised definitions proposed by NERC for inclusion in the NERC Glossary and the retirement of currently-effective Reliability Standard BAL-002-1 immediately prior to the effective date of Reliability Standard BAL-002-2. The Commission also approves, with one modification, Reliability Standard BAL-002-2's associated violation risk factors and violation severity levels, and implementation plan. --------------------------------------------------------------------------- \1\ 16 U.S.C. 824(o). \2\ ACE is the instantaneous difference between a balancing authority's Net Actual and Scheduled Interchange, taking into account the effects of Frequency Bias, correction for meter error, and Automatic Time Error Correction (ATEC), if operating in ATEC mode. ATEC is only applicable to balancing authorities in the Western Interconnection. NERC Glossary of Terms Used in NERC Reliability Standards (NERC Glossary) at 7 (updated September 29, 2016). --------------------------------------------------------------------------- 2. Pursuant to section 215(d)(5) of the FPA,\3\ the Commission directs NERC to develop modifications to Reliability Standard BAL-002- 2, Requirement R1 to address concerns related to the potential reliability impact of repeated extensions of the period for ACE recovery. To address the concerns, the Notice of Proposed Rulemaking (NOPR) proposed directing that NERC modify the Reliability Standard to require reliability coordinator approval of extensions of the ACE recovery period. Numerous commenters opposed the proposal, arguing that the proposal has the potential to complicate an already challenging situation. Thus, to address the underlying concern while cognizant of the NOPR comments, the final rule adopts a different approach of directing NERC to develop modifications to Reliability Standard BAL- 002-2 that would require an entity to provide certain information to the reliability coordinator when the entity does not timely recover ACE due to an intervening disturbance. As discussed below, the Commission also directs NERC: (1) To collect and report on data related to resets of the contingency reserve restoration period; and (2) to study and report on the reliability risks associated with megawatt losses above an applicable entity's most severe single contingency (MSSC) that do not cause energy emergencies. --------------------------------------------------------------------------- \3\ 16 U.S.C. 824o(d)(5). --------------------------------------------------------------------------- I. Background 3. Section 215 of the FPA requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards that are subject to Commission review and approval. The Commission may approve, by rule or order, a proposed Reliability Standard or modification to a Reliability Standard [[Page 8995]] if it determines that the Reliability Standard is just, reasonable, not unduly discriminatory or preferential and in the public interest.\4\ Once approved, the Reliability Standards may be enforced by NERC, subject to Commission oversight, or by the Commission independently.\5\ Pursuant to section 215 of the FPA, the Commission established a process to select and certify an ERO,\6\ and subsequently certified NERC.\7\ --------------------------------------------------------------------------- \4\ Id. 824o(d)(2). \5\ Id. 824o(e). \6\ Rules Concerning Certification of the Electric Reliability Organization; and Procedures for the Establishment, Approval, and Enforcement of Electric Reliability Standards, Order No. 672, FERC Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC Stats. & Regs. ] 31,212 (2006). \7\ North American Electric Reliability Corp., 116 FERC ] 61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009). --------------------------------------------------------------------------- 4. On March 16, 2007, the Commission issued Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC, including Reliability Standard BAL-002-0.\8\ In addition, pursuant to section 215(d)(5) of the FPA, the Commission directed the ERO to develop modifications to Reliability Standard BAL-002-0: (1) To include a requirement that explicitly provides that demand side management may be used as a resource for contingency reserves; (2) to develop a continent-wide contingency reserve policy; and (3) to refer to the ERO rather than the NERC Operating Committee in Requirements R4.2 and R6.2.\9\ On January 10, 2011, the Commission approved Reliability Standard BAL-002-1, which addressed the third directive described above.\10\ --------------------------------------------------------------------------- \8\ Mandatory Reliability Standards for the Bulk-Power System, Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007). \9\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 356. \10\ North American Electric Reliability Corp., 134 FERC ] 61,015 (2011). --------------------------------------------------------------------------- II. NERC Petition and Reliability Standard BAL-002-2 5. On January 29, 2016, NERC filed a petition seeking approval of Reliability Standard BAL-002-2; \11\ eight new or revised definitions to be added to the NERC Glossary; and Reliability Standard BAL-002-2's associated violation risk factors and violation severity levels, effective date, and implementation plan.\12\ NERC stated that Reliability Standard BAL-002-2 is just, reasonable, not unduly discriminatory or preferential, and in the public interest because it satisfies the factors set forth in Order No. 672, which the Commission applies when reviewing a proposed Reliability Standard.\13\ NERC also asserted that Reliability Standard BAL-002-2 addresses the outstanding directives from Order No. 693 regarding the use of demand side management as a resource for contingency reserve and the development of a continent-wide contingency reserve policy. --------------------------------------------------------------------------- \11\ Reliability Standard BAL-002-2 is available on the Commission's eLibrary document retrieval system in Docket No. RM16- 7-000 and on the NERC Web site, www.nerc.com. \12\ The eight proposed new and revised definitions for inclusion in the NERC Glossary are for the following terms: Balancing Contingency Event, Most Severe Single Contingency, Reportable Balancing Contingency Event, Contingency Event Recovery Period, Contingency Reserve Restoration Period, Pre-Reporting Contingency Event ACE Value, Reserve Sharing Group Reporting ACE, and Contingency Reserve. NERC Petition at 28-34. \13\ NERC Petition at 13 and Ex. F (Order No. 672 Criteria). --------------------------------------------------------------------------- 6. Reliability Standard BAL-002-2 consolidates six requirements in currently-effective Reliability Standard BAL-002-1 into three requirements and is applicable to balancing authorities and reserve sharing groups. NERC stated that Reliability Standard BAL-002-2 improves upon existing Reliability Standard BAL-002-1 because ``it clarifies obligations associated with achieving the objective of BAL- 002 by streamlining and organizing the responsibilities required therein, enhancing the obligation to maintain reserves, and further defining events that predicate action under the standard.'' \14\ NERC also stated that Reliability Standard BAL-002-2 ``address[es] and supersede[s]'' the proposed interpretation previously submitted by NERC (i.e., of Reliability Standard BAL-002-1a) and pending in Docket No. RM13-6-000.\15\ --------------------------------------------------------------------------- \14\ Id. at 13. \15\ Id. at 1. On February 12, 2013, NERC filed a proposed interpretation of Reliability Standard BAL-002-1 that construed the Reliability Standard so that the 15-minute ACE recovery period would not apply to events of a magnitude exceeding an entity's most severe single contingency. In a NOPR issued on May 16, 2013, the Commission proposed to remand the proposed interpretation on procedural grounds. Electric Reliability Organization Interpretation of Specific Requirements of the Disturbance Control Performance Standard, 143 FERC ] 61,138 (2013). The rulemaking on the proposed interpretation is pending. In the petition in the immediate proceeding, NERC states that, upon approval of Reliability Standard BAL-002-2, NERC will file a notice of withdrawal of the proposed interpretation. NERC Petition at 1. --------------------------------------------------------------------------- 7. Requirement R1 of BAL-002-2 requires a balancing authority or reserve sharing group experiencing a Reportable Balancing Contingency Event to deploy its contingency reserves to recover its ACE to certain prescribed values within the Contingency Event Recovery Period of 15 minutes.\16\ However, under certain circumstances, Reliability Standard BAL-002-2 relieves responsible entities from strict compliance with the existing time periods for ACE recovery and contingency reserve restoration ``to ensure responsible entities retain flexibility to maintain service to Demand, while managing reliability, and to avoid duplication with other Reliability Standards.'' \17\ --------------------------------------------------------------------------- \16\ NERC proposes to define Reportable Balancing Contingency Event as: ``Any Balancing Contingency Event occurring within a one- minute interval of an initial sudden decline in ACE based on EMS scan rate data that results in a loss of MW output less than or equal to the Most Severe Single Contingency, and greater than or equal to the lesser amount of: (i) 80% of the Most Severe Single Contingency, or (ii) the amount listed below for the applicable Interconnection. Prior to any given calendar quarter, the 80% threshold may be reduced by the responsible entity upon written notification to the Regional Entity.'' NERC Petition at 30. Contingency Event Recovery Period, as proposed by NERC, means: ``A period that begins at the time that the resource output begins to decline within the first one-minute interval of a Reportable Balancing Contingency Event, and extends for fifteen minutes thereafter.'' Id. at 32. \17\ Id. at 4. --------------------------------------------------------------------------- 8. Specifically, Requirement R1, Part 1.3.1 provides that a balancing authority or reserve sharing group is not subject to Requirement R1, Part 1.1 if it: (1) Is experiencing a Reliability Coordinator declared Energy Emergency Alert Level; (2) is utilizing its contingency reserve to mitigate an operating emergency in accordance with its emergency Operating Plan, and (3) has depleted its contingency reserve to a level below its most severe single contingency. 9. In addition, under Requirement R1, Part 1.3.2, a balancing authority or reserve sharing group is not subject to Requirement R1, Part 1.1 if the balancing authority or reserve sharing group experiences: (1) Multiple Contingencies where the combined megawatt (MW) loss exceeds its most severe single contingency and that are defined as a single Balancing Contingency Event or (2) multiple Balancing Contingency Events within the sum of the time periods defined by the Contingency Event Recovery Period and Contingency Reserve Restoration Period whose combined magnitude exceeds the Responsible Entity's most severe single contingency. 10. Requirement R2 provides that each responsible entity: shall develop, review and maintain annually, and implement an Operating Process as part of its Operating Plan to determine its Most Severe Single Contingency and to make preparations to have Contingency Reserve equal to, or greater than the Responsible Entity's Most Severe Single Contingency available for maintaining system reliability. [[Page 8996]] NERC explained that Requirement R2 requires responsible entities to demonstrate that their process for calculating their most severe single contingency ``surveys all contingencies, including single points of failure, to identify the event that would cause the greatest loss of resource output used by the [reserve sharing group or balancing authority] to meet Firm Demand.'' \18\ NERC further stated that Requirement R2 supports Requirements R1 and R3 in Reliability Standard BAL-002-2 ``as these requirements rely on proper calculation of [most severe single contingency].'' \19\ --------------------------------------------------------------------------- \18\ Id. at 25. \19\ Id. NERC provides examples of how responsible entities may calculate the most severe single contingency in the petition. See NERC Petition, Ex. B (Calculating Most Severe Single Contingency). --------------------------------------------------------------------------- 11. Requirement R3 provides that ``each Responsible Entity, following a Reportable Balancing Contingency Event, shall restore its Contingency Reserve to at least its Most Severe Single Contingency, before the end of the Contingency Reserve Restoration Period [90 minutes], but any Balancing Contingency Event that occurs before the end of a Contingency Reserve Restoration Period resets the beginning of the Contingency Event Recovery Period.'' 12. NERC explained that the revised language in the consolidated requirements in Reliability Standard BAL-002-2 will improve efficiency and clarity by removing ``unnecessary entities from compliance to capture only those entities that are vital for reliability.'' \20\ NERC stated that the new definitions for Balancing Contingency Event and Reportable Balancing Contingency Event more clearly identify the types of events that cause frequency deviations necessitating action under Reliability Standard BAL-002-2 and provide additional detail regarding the types of resources that may be identified as contingency reserves. Furthermore, NERC stated that Reliability Standard BAL-002-2 ``ensures objectivity of the reserve measurement process by guaranteeing a Commission-sanctioned continent-wide reserve policy,'' and therefore satisfies an outstanding Order No. 693 directive for uniform elements, definitions and requirements for a continent-wide contingency reserve policy.\21\ Finally, NERC asserted that the revised definition of Contingency Reserves ``improves the existing definition by addressing a Commission directive in Order No. 693 to allow demand side management to be used as a resource for contingency reserve when necessary.'' \22\ --------------------------------------------------------------------------- \20\ NERC Petition at 14. \21\ Id. \22\ Id. at 33. --------------------------------------------------------------------------- 13. NERC submitted proposed violation risk factors and violation severity levels for each requirement of Reliability Standard BAL-002-2 and an implementation plan and effective dates. NERC stated that these proposals were developed and reviewed for consistency with NERC and Commission guidelines. NERC proposed an effective date for Reliability Standard BAL-002-2 that is the first day of the first calendar quarter that is six months after the date of Commission approval. NERC explained that this implementation date will allow entities to make necessary modifications to existing software programs to ensure compliance.\23\ --------------------------------------------------------------------------- \23\ NERC Petition, Ex. D (Implementation Plan) at 3. --------------------------------------------------------------------------- 14. On February 12, 2016, NERC submitted a supplemental filing to clarify a statement in the petition that Reliability Standard BAL-002-2 would operate in conjunction with Reliability Standard TOP-007-0 to control system frequency by addressing transmission line loading in the event of a transmission overload. NERC explained that, while Reliability Standard TOP-007-0 will be retired on April 1, 2017, ``the obligations related to [transmission line loading] under TOP-007-0 will be covered by Commission-approved TOP-001-3, EOP-003-2, IRO-009-2, and IRO-008-2 . . . by requiring relevant functional entities to communicate [Interconnection Reliability Operating Limits (IROL)] and [System Operating Limits (SOL)] exceedances so that the [reliability coordinator] can direct appropriate corrective action to mitigate or prevent those events.'' \24\ --------------------------------------------------------------------------- \24\ NERC February 12, 2016 Supplemental Filing at 2-3. --------------------------------------------------------------------------- 15. On March 31, 2016, NERC submitted a second supplemental filing to ``further clarify the extent to which BAL-002-2 interacts with other Commission-approved Reliability Standards to promote Bulk Power System reliability . . . [and support] the overarching policy objective reflected in the stated purpose of Reliability Standard BAL-002-2.'' \25\ In its filing, NERC expanded upon the explanation in the petition regarding how an ``integrated'' and ``coordinated suite of Reliability Standards'' (BAL-001-2, BAL-003-1, TOP-007-0, EOP-002-3, EOP-011-1, IRO-008-2, and IRO-009-2) will apply to events causing MW losses above a responsible entity's most severe single contingency, and how those other Reliability Standards are better designed to manage the greater risks created by such events.\26\ --------------------------------------------------------------------------- \25\ NERC March 31, 2016 Supplemental Filing at 1, 5. \26\ Id. at 2-5. --------------------------------------------------------------------------- III. Notice of Proposed Rulemaking 16. On May 19, 2016, the Commission issued a NOPR proposing to approve Reliability Standard BAL-002-2 as just, reasonable, not unduly discriminatory or preferential and in the public interest.\27\ The Commission also proposed to approve NERC's eight proposed new and revised definitions and the retirement of currently-effective Reliability Standard BAL-002-1. Further, the Commission proposed to direct NERC to change the proposed violation risk factor from ``medium'' to ``high'' for Reliability Standard BAL-002-2, Requirements R1 and R2. --------------------------------------------------------------------------- \27\ Disturbance Control Standard--Contingency Reserve for Recovery from a Balancing Contingency Event Reliability Standard, Notice of Proposed Rulemaking, 81 FR 33,441 (May 26, 2016), 155 FERC ] 61,180 (2016) (NOPR). --------------------------------------------------------------------------- 17. In the NOPR, the Commission recognized that it is essential for grid reliability that responsible entities balance resources and demand and restore system frequency to recover from a system event, and that they maintain reserves necessary to replace capacity and energy lost due to generation or transmission outages. The Commission also stated that Reliability Standard BAL-002-2 improves upon currently-effective Reliability Standard BAL-002-1 by consolidating requirements to streamline and clarify the obligations related to achieving these goals. However, the Commission raised concerns regarding possible extensions of the 15-minute ACE recovery period and the 90-minute Contingency Reserve Restoration Period, as well as NERC's proposal to limit the scope of Reliability Standard BAL-002-2 to a responsible entity's most severe single contingency. 18. In the NOPR, the Commission sought comment on the following issues: (1) Reliability coordinator authorization of extensions of the 15-minute ACE recovery period; (2) resets or credits during the 90- minute Contingency Reserve Restoration Period; (3) the exclusion of megawatt losses above the most severe single contingency in the proposed definition of Reportable Balancing Contingency Event; and (4) NERC's proposal to reduce from ``high'' to ``medium'' the violation risk factor for proposed Requirements R1 and R2. The Commission also sought comment on whether NERC's proposed definition of contingency reserve should include the NERC-defined term Demand-side Management. [[Page 8997]] 19. In response to the NOPR, the Commission received 11 sets of comments. We address below the issues raised in the NOPR and comments. The Appendix to this final rule lists the entities that filed comments in response to the NOPR. IV. Discussion 20. Pursuant to FPA section 215(d)(2), we approve Reliability Standard BAL-002-2 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. We also approve NERC's eight new and revised proposed definitions and, with one exception, the proposed violation risk factor and violation severity level assignments. In addition, we approve NERC's implementation plan establishing an effective date of the first day of the first calendar quarter, six months after the date of Commission approval, and the retirement of currently-effective BAL-002-1 immediately before that date.\28\ --------------------------------------------------------------------------- \28\ NERC Petition, Ex. D (Implementation Plan) at 3. --------------------------------------------------------------------------- 21. The purpose of Reliability Standard BAL-002-2 is to ensure that balancing authorities and reserve sharing groups balance resources and demand and return their ACE to defined values following a Reportable Balancing Contingency Event. We determine that Reliability Standard BAL-002-2 improves upon currently-effective Reliability Standard BAL- 002-1 by consolidating the number of requirements to streamline and clarify the obligations for responsible entities to deploy contingency reserves to stabilize system frequency in response to system contingencies. 22. We conclude that BAL-002-2 satisfies the Order No. 693 directive that NERC develop a continent-wide contingency reserve policy.\29\ Also, we accept NERC's explanation in response to the NOPR that demand side resources that are technically capable can be included as contingency reserves, and therefore determine that Reliability Standard BAL-002-2 satisfies the Order No. 693 directive that demand side management may be used as a resource for contingency reserves.\30\ --------------------------------------------------------------------------- \29\ Order No. 693, FERC Stats. & Regs ] 31,242 at PP 340, 341 and 356. \30\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 330, 335 and 356. In its comments NERC explained that ``[t]he proposed definition balances the need for flexibility to include a variety of demand side resources in measurements of Contingency Reserve with the need to define the types of demand side resources that are `technically capable' to serve as contingency reserve.'' NERC Comments at 30. --------------------------------------------------------------------------- 23. In addition, pursuant to section 215(d)(5) of the FPA, we direct NERC to develop modifications to Reliability Standard BAL-002-2 to address our concerns, discussed below, regarding the 15-minute ACE recovery period set forth in Requirement R1. We also direct NERC to collect and report on data pertaining to the occurrence of Balancing Contingency Events that trigger resets of the 90-minute Contingency Reserve Restoration Period under Requirement R3. We further direct NERC to study and submit a report to the Commission with findings regarding reliability risks associated with most severe single contingency exceedances that do not result in energy emergencies. 24. We discuss below the following issues raised in the NOPR and addressed in the comments: (A) Whether a reliability coordinator must expressly authorize extensions of the 15-minute ACE recovery period; (B) whether BAL-002-2 should be modified to require all contingency reserves to be restored within the 90-minute Contingency Reserve Restoration Period; (C) whether a reasonable obligation should be imposed for balancing authorities and reserve sharing groups to address scenarios involving megawatt losses above the most severe single contingency that do not cause energy emergencies; and (D) NERC's proposal to reduce from ``high'' to ``medium'' the violation risk factor for Requirements R1 and R2. A. The 15-Minute ACE Recovery Period NERC Petition 25. In its petition, NERC stated that the ``exemption'' from the 15-minute ACE recovery period in Requirement R1, Part 1.3.1 ``eliminates the existing conflict with EOP-011-1, as it removes undefined auditor discretion when assessing compliance and allows the responsible entity flexibility to maintain service to load while managing reliability.'' \31\ NERC explained that this exemption does not eliminate an entity's obligation to respond to a Reportable Balancing Contingency Event, but rather it will ``simply allow more time to return the Reporting ACE to the defined limits than would otherwise be allowed.'' \32\ --------------------------------------------------------------------------- \31\ NERC Petition at 22. \32\ Id. at 24. --------------------------------------------------------------------------- NOPR 26. In the NOPR, the Commission noted that Reliability Standard BAL-002-2, Requirement R1 obligates a responsible entity that experiences a Reportable Balancing Contingency Event to return its Reporting ACE to pre-defined values within the 15-minute Contingency Event Recovery Period. Further, the Reliability Standard does not expressly provide a definitive and enforceable deadline for ACE recovery during a reliability coordinator-declared Energy Emergency Alert accompanied by the depletion of the entity's contingency reserves to below its most severe single contingency. 27. The Commission stated that NERC's explanation for relief from the 15-minute ACE recovery period in Reliability Standard BAL-002-2 raises concerns, because it is unclear how or when an entity will prepare for a second contingency during the indeterminate extension of the 15-minute ACE recovery period that Requirement R1, Part 1.3 permits. The Commission observed that a balancing authority that is operating out-of-balance for an extended period of time is ``leaning on the system'' by relying on external resources to meet its obligations. That could affect other entities within an Interconnection, particularly if another entity is reacting to a grid event while unaware that the first entity has not restored its ACE.\33\ While an extension of the 15-minute ACE recovery period may be appropriate under certain emergency conditions, the NOPR explained that, with a wide-area view and superior information and objectivity, the reliability coordinator is in a better position to decide whether to extend the ACE recovery period after an entity has met the criteria described in Requirement R1, Part 1.3.1. --------------------------------------------------------------------------- \33\ NOPR, 155 FERC ] 61,180 at P 22. --------------------------------------------------------------------------- 28. Further, while Reliability Standard EOP-011-1, Requirement R3, requires the reliability coordinator to review balancing authority Operating Plans and notify a balancing authority of any ``reliability risks'' the reliability coordinator may identify with a time frame for the resubmittal of revised Operating Plans, the NOPR explained that the Reliability Standard does not require reliability coordinator approval of Operating Plans. 29. Therefore, the NOPR proposed to direct NERC to develop modifications to Reliability Standard BAL-002-2 that would require Reporting ACE recovery within the 15-minute Contingency Event Recovery Period unless the relevant reliability coordinator expressly authorizes an extension of the 15-minute ACE recovery period after the balancing authority has met the criteria described in Requirement R1, Part 1.3.1. The Commission's proposal included modifying Reliability Standard BAL- 002-2 to identify the reliability coordinator as an Applicable Entity. [[Page 8998]] Comments 30. NERC, EEI, NRECA, TVA, CEA, Joint Commenters, IESO and APS oppose the proposed directive. NERC asserts that the proposed directive is unnecessary because the Balancing Authority ACE Limit (BAAL) and a balancing authority's resource obligations under Reliability Standard BAL-001-2 discourage balancing authorities from leaning on the system during extensions of the Contingency Event Recovery Period. NERC explains that the BAAL: is a unique limit on a [balancing authority's] Reporting ACE based on Real-time interconnection frequency levels . . . since the loss of a resource would influence the Interconnection's frequency, the BAAL would adjust (or `tighten') to assure that the Interconnection frequency remains in a safe range. The [balancing authority] must return its operations to within the `tightened' BAAL within 30 minutes and thus would not be able to `lean' on the Interconnection for any prolonged period.\34\ --------------------------------------------------------------------------- \34\ NERC Comments at 10. 31. Further, NERC contends that the proposed role for reliability coordinators is unnecessary--in both emergency and non-emergency situations--because the reliability coordinator ``must maintain constant oversight of reliability within its [reliability coordinator] area and direct other responsible entities to take actions necessary to maintain reliability.'' \35\ --------------------------------------------------------------------------- \35\ Id. at 11 (citing Reliability Standards EOP-0011-1, EOP- 003-2, IRO-001-4, IRO-002-4, IRO-008-2, and IRO-009-2). --------------------------------------------------------------------------- 32. EEI and Joint Commenters assert that the NOPR proposal ``would result in unnecessary duplication of requirements adding no tangible benefit to reliability while needlessly increasing the compliance burden.'' \36\ Joint Commenters also note the infrequent nature of multiple-contingency events and Energy Emergency Alerts (EEAs), describing them as ``exceptional circumstances appropriate for an exemption from the typical measured requirements.'' \37\ Joint Commenters state that in 2015 there were ten EEA Level 2 and Level 3 events, and that ``most [balancing authorities] experience no EEA events in a given year . . . allowing recovery exceptions during these exceptional circumstances would not create significant risk with respect to ACE recovery responsibilities.'' \38\ Joint Commenters also contend that in a ``multiple-contingency event or during an EEA, there are likely scores of activities occupying the [reliability coordinator's] attention. Requiring the [balancing authority] and [reliability coordinator] to conduct a conference call during an EEA to discuss the merits of requests for additional ACE recovery time only complicates these already-challenging conditions.'' \39\ --------------------------------------------------------------------------- \36\ EEI Comments at 7; see also Joint Commenters Comments at 2- 4. \37\ Joint Commenters Comments at 4. \38\ Id. (citing NERC's 2016 State of Reliability Report at 38). \39\ Id. at 3. --------------------------------------------------------------------------- 33. While supporting the notification and involvement of reliability coordinators, APS shares Joint Commenters' concern that requiring reliability coordinators to expressly authorize extensions of the 15-minute ACE recovery period could distract responsible entities from focusing on ``maintaining and recovering the reliability of the [bulk electric system].'' \40\ Therefore, as an alternative to the NOPR proposal, APS proposes that balancing authorities obtain extensions of the 15-minute ACE recovery period under the extenuating circumstances described in Requirement R1, Part 1.3.1 by notifying the reliability coordinator of the conditions within its area and providing the reliability coordinator with an ACE recovery plan and target time period, but without obtaining express approval from the reliability coordinator.\41\ --------------------------------------------------------------------------- \40\ APS Comments at 4-5. \41\ Id. at 5. --------------------------------------------------------------------------- 34. Idaho Power and BPA support the Commission's proposal to expressly require reliability coordinator authorization for extensions of the 15-minute Reporting ACE recovery period. Idaho power agrees with ``shifting more oversight to the Reliability Coordinator'' as the entity with the system-wide view.\42\ --------------------------------------------------------------------------- \42\ Idaho Power Comments at 2; see also BPA Comments at 3. --------------------------------------------------------------------------- Commission Determination 35. We are persuaded by the commenters not to adopt the NOPR proposal that would require reliability coordinator authorization to extend the 15-minute ACE recovery period. As commenters explain, seeking the proposed reliability coordinator authorization while recovering from a disturbance has the potential to complicate an already-challenging situation. However, we continue to see a need to address the underlying concern expressed in the NOPR that a balancing authority that is operating out-of-balance for an extended period of time is ``leaning on the system'' by relying on external resources to meet its obligations. That scenario could affect other entities within an Interconnection, particularly if another entity is reacting to a grid event while unaware that the first entity has not restored its ACE. Accordingly, to address our concern without requiring reliability coordinator authorization, we adopt APS's proposed alternative that would require a balancing authority or reserve sharing group experiencing a depletion of contingency reserves below its most severe single contingency level during an Energy Emergency Alert to obtain an extension of the 15-minute ACE recovery period by informing the reliability coordinator of the circumstances and providing it with an ACE recovery plan and target time period. 36. We are persuaded that APS's approach is reasonable and adequately addresses concerns with extensions of the 15-minute ACE recovery period. By requiring notification of reliability coordinators and providing the reliability coordinator with an ACE recovery plan and target time period, we agree that the APS proposal ``would allow appropriate flexibility to [balancing authorities] when extenuating circumstances are present while providing [reliability coordinators] with the necessary data, communication, and coordination to fulfill their oversight responsibilities to the Interconnection.'' \43\ --------------------------------------------------------------------------- \43\ APS Comments at 8. --------------------------------------------------------------------------- 37. Accordingly, we direct NERC to develop modifications to Reliability Standard BAL-002-2, Requirement R1 to require balancing authorities or reserve sharing groups: (1) To notify the reliability coordinator of the conditions set forth in Requirement R1, Part 1.3.1 preventing it from complying with the 15-minute ACE recovery period; and (2) to provide the reliability coordinator with its ACE recovery plan, including a target recovery time. NERC may also propose an equally efficient and effective alternative. B. The 90-Minute Contingency Reserve Restoration Period NERC Petition 38. Reliability Standard BAL-002-2, Requirement R3 requires a balancing authority or reserve sharing group to restore its contingency reserves to at least its most severe single contingency before the end of the 90-minute Contingency Reserve Restoration Period.\44\ Requirement R3 also provides for an automatic ``reset'' of the 90- [[Page 8999]] minute restoration period based upon any Balancing Contingency Event that occurs during the restoration period.\45\ --------------------------------------------------------------------------- \44\ NERC Petition, Ex. D (Implementation Plan). The 90-minute contingency reserve restoration period begins after the end of the 15-minute ACE restoration period under Requirement R1. Accordingly, responsible entities must restore contingency reserves within 105 minutes of the occurrence of a Reportable Balancing Contingency Event to comply with Requirement R3. \45\ Balancing Contingency Event means: ``Any single event described in Subsections (A), (B), or (C) below, or any series of such otherwise single events, with each separated from the next by one minute or less. A. Sudden loss of generation: a. Due to i. unit tripping, ii. loss of generator Facility resulting in isolation of the generator from the Bulk Electric System or from the responsible entity's System, or iii. sudden unplanned outage of transmission Facility; b. And, that causes an unexpected change to the responsible entity's ACE; B. Sudden loss of an import, due to unplanned outage of transmission equipment that causes an unexpected imbalance between generation and Demand on the Interconnection. C. Sudden restoration of a Demand that was used as a resource that causes an unexpected change to the responsible entity's ACE.'' NERC Petition Ex. D. --------------------------------------------------------------------------- NOPR 39. In the NOPR, the Commission proposed to direct NERC to modify Reliability Standard BAL-002-2 to ``eliminate the potential for unlimited resets and ensure that contingency reserves must be restored within the 90-minute Contingency Reserve Restoration Period.'' \46\ The Commission sought comment on a possible alternative that would give a balancing authority or reserve sharing group ``credits'' for megawatt losses resulting from Balancing Contingency Events during the 90-minute restoration period, and allow an additional 90 minutes to restore reserves related to those megawatt losses.\47\ --------------------------------------------------------------------------- \46\ NOPR, 155 FERC ] 61,180 at P 29. \47\ Id. PP 27-29. --------------------------------------------------------------------------- Comments 40. NERC, EEI, NRECA, CEA, Joint Commenters, IESO and APS support approval of Requirement R3 as filed. NERC asserts that, because of resource limitations and the potential compliance exposure to other Reliability Standards, including the Reporting ACE recovery requirements in Reliability Standard BAL-001-2, entities will not experience unlimited resets of the 90-minute restoration period.\48\ NERC explains that ``[i]f an entity continues to trip units before full recovery of other units, the responsible entity would eventually fail to meet obligations under other Reliability Standards (including the requirement to recover ACE within 15 minutes under proposed BAL-002-2) and may eventually enter into an Emergency situation under [reliability coordinator] oversight . . .'' \49\ NERC states that balancing authorities and reserve sharing groups would still be required to actively restore contingency reserves even after experiencing a Balancing Contingency Event during the 90-minute restoration period. Such events, according to NERC, ``would merely extend the Contingency Reserve Restoration Period to ensure that the responsible entity has adequate time to recover from consecutive losses.'' \50\ NERC asserts that the Commission's proposed credit approach ``would be confusing and burdensome, and it may attract attention away from full and final restoration of the Contingency Reserve.'' \51\ EEI agrees, adding that, ``in light of existing standards, this concern does not pose a sufficient risk to system reliability to merit NERC developing modifications to the standard.'' \52\ --------------------------------------------------------------------------- \48\ NERC Comments at 17-18. \49\ Id. at 17. \50\ Id. at 16. \51\ Id. at 18-19. \52\ EEI Comments at 8. --------------------------------------------------------------------------- 41. IESO and CEA claim that modifications to Reliability Standard BAL-002-2, Requirement R1 to eliminate the potential for unlimited resets are unnecessary. IESO questions the concern about unlimited resets of the Contingency Reserve Restoration Period, stating that it ``would suggest that multiple resource loss events could somehow benefit or unburden a [balancing authority's] obligation to restore the reserve level . . . [rather] the infrequent event of a reset occurrence is more appropriately viewed as simply not applying double jeopardy to a [balancing authority] that is already in a troubled situation.'' \53\ IESO further states that a reset of the contingency reserve restoration period ``will simply provide the opportunity for the involved balancing authority to reassess the situation and act accordingly to replenish the contingency reserve'' to comply with BAL-002-2.\54\ Both IESO and CEA assert that balancing authorities ``have a strong track record of acting in good faith.'' \55\ CEA also notes that ``since a [balancing authority] does not own any resources, it cannot trigger or otherwise intentionally cause an additional loss of resource during the 90-minute period in order to reset the recovery period.'' \56\ --------------------------------------------------------------------------- \53\ IESO Comments at 4-5. \54\ Id. at 5; see also CEA Comments at 5. \55\ CEA Comments at 5; see also IESO Comments at 5. \56\ CEA Comments at 4; see also IESO Comments at 5. --------------------------------------------------------------------------- 42. Joint Commenters also oppose the Commission's proposal, explaining that ``following a unit trip that results in a [Balancing Contingency Event], the generator's telemetry is often invalid or suspect for some time, and if the [balancing authority] is unable to accurately quantify the actual MW loss, it may be required to take extreme actions, including shedding firm load, simply to meet the 90- minute contingency recovery requirement.'' \57\ Joint Commenters claim that the ``likelihood of such an occurrence of multiple independent generation losses absent a catastrophic transmission failure is also very low.'' \58\ Joint Commenters state that on average, one generator is lost in the Eastern Interconnection every 7 to 8 days, and ``the probability of four random large generator trips in the Eastern Interconnection in a two hour period was one in 350 years.'' \59\ --------------------------------------------------------------------------- \57\ Joint Commenters Comments at 5. \58\ Id. \59\ Joint Commenters Comments at 6 (citing a probability analysis performed during the Reliability Standard BAL-003-1 development process using frequency event data for January 2006 to September 2012). --------------------------------------------------------------------------- 43. BPA and Idaho Power support the Commission's proposal to require balancing authorities to restore contingency reserves within the 90-minute Contingency Event Recovery Period and receive ``credits'' for megawatt losses during the Contingency Event Recovery Period. TVA believes the potential for unlimited resets of the 90-minute restoration period is ``extremely remote,'' but TVA supports the credit proposal as a ``reasonable approach'' for managing multiple events during a contingency restoration period. Commission Determination 44. The Commission determines not to adopt the NOPR proposal that NERC modify Reliability Standard BAL-002-2 to establish a firm requirement that responsible entities must restore contingency reserves within the 90-minute Contingency Reserve Restoration Period. Based on the comments, we are satisfied that occurrences of multiple Balancing Contingency Events during the 90-minute restoration period are rare and would be temporally bounded by the Reporting ACE recovery requirements in Reliability Standard BAL-001-2. We also acknowledge NERC's comment that intervening Balancing Contingency Events do not relieve balancing authorities and reserve sharing groups of their obligation to restore contingency reserves by the end of the reset period. Further, we acknowledge Joint Commenters' concern that determining the amount of megawatt losses to ``credit'' could be a distraction from the contingency reserve restoration effort, and the benefits from the proposed ``credit'' approach could be offset by unnecessary load shedding caused by potential confusion and [[Page 9000]] uncertainties associated with its implementation. 45. While, as stated in the NOPR, under some circumstances, extensions of the 90-minute Contingency Reserve Restoration Period may be appropriate, the comments do not fully address the concern expressed in the NOPR with resets resulting from additional megawatt losses following a Reportable Balancing Contingency Event. Therefore, although we determine not to direct modifications to the Reliability Standard, we conclude that the automatic reset provision of Reliability Standard BAL-002-2, Requirement R3 should be monitored for potential problems. 46. Accordingly, the Commission directs NERC to collect and report data pertaining to: (1) Additional megawatt losses following Reportable Balancing Contingency Events during the Contingency Reserve Restoration Period; and (2) the time periods for contingency reserve restoration under Requirement R3 and the number of resets of the 90-minute restoration period, and submit a report to the Commission two years following the first day of implementation of Requirement R3. After NERC reports on the data in a compliance filing, the Commission will consider what further action, if any, to take. C. Exclusion of Megawatt Losses Above the Most Severe Single Contingency NERC Petition 47. NERC's definition of Reportable Balancing Contingency Event limits balancing authority and reserve sharing group responsibility to megawatt losses between 80 percent and 100 percent of their most severe single contingency that occur within a one minute interval.\60\ In its petition, NERC asserted that an ``integrated and coordinated'' suite of set of Reliability Standards (BAL-001-2, BAL-003-1, TOP-007-0, EOP-002- 3, EOP-011-1, IRO-008-2, and IRO-009-2) will address the ``complex issues'' resulting from exceedances of the most severe single contingency.\61\ --------------------------------------------------------------------------- \60\ See NERC Petition, Ex. D (Implementation Plan) at 2. \61\ NERC Petition at 15. --------------------------------------------------------------------------- NOPR 48. In the NOPR, the Commission expressed concern about the exclusion of megawatt losses above a responsible entity's most severe single contingency from the scope of Reliability Standard BAL-002-2. The Commission questioned the assumption that all such megawatt losses, however small, warrant the proposed limitation on Reliability Standard BAL-002-2.\62\ Further, while recognizing the protections that the related set of Reliability Standards may provide in extreme circumstances, the Commission noted that megawatt exceedances of the most severe single contingency that do not cause energy emergencies or otherwise implicate the set of Reliability Standards cited by NERC could result in a reliability gap; they also could create the potential for balancing authorities to lean on the Interconnection by indefinitely relying on neighboring balancing authorities' resources.\63\ --------------------------------------------------------------------------- \62\ NOPR, 155 FERC ] 61,180 at P 33. \63\ Id. --------------------------------------------------------------------------- 49. In the NOPR, the Commission did not propose a specific approach but, rather, sought comment on how to address this possible reliability gap and whether to impose a reasonable obligation for balancing authorities and reserve sharing groups to address scenarios involving megawatt losses above the most severe single contingency that do not cause energy emergencies. The NOPR stated that, based on the comments, the Commission may direct that NERC develop a new or modified Reliability Standard to address that reliability gap.\64\ --------------------------------------------------------------------------- \64\ Id. at 34. --------------------------------------------------------------------------- Comments 50. NERC, EEI, NRECA, TVA, BPA, CEA, Joint Commenters, IESO, and APS assert that concerns about a possible reliability gap are unfounded and urge the Commission to approve Reliability Standard BAL-002-2 as filed. NERC maintains that the limitation on the scope of Reliability Standard BAL-002-2 will not create a reliability gap and reasserts its view that an integrated, coordinated suite of Reliability Standards ``will address important reliability issues and prohibit entities from being able to `lean' on the Interconnection when contingency events cause MW losses greater than an entity's MSSC.'' \65\ NERC states that in situations involving megawatt losses above the most severe single contingency, reliability issues associated with ACE recovery and contingency reserve restoration become less important and other reliability issues ``such as transmission line-loading issues or frequency deviations'' create more immediate reliability threats and warrant priority status.\66\ --------------------------------------------------------------------------- \65\ NERC Comments at 20 (citing Reliability Standards BAL-001- 2, BAL-003-1, EOP-002-3, EOP-011-1, IRO-001-4, TOP-001-3, IRO-008-2, and IRO-009-2). \66\ Id. --------------------------------------------------------------------------- 51. EEI agrees with NERC, and also notes that exceedances of the most severe single contingency that do not create energy emergencies generally raise commercial, not reliability, issues. Further, EEI asserts that tightening Reliability Standard BAL-002-2 by requiring balancing authorities to address megawatt losses above the most severe single contingency ``could have unintended consequences that limit the flexibility of the [reliability coordinators] and [balancing authorities] to work together under the existing suite of standards to address such complex situations . . .'' \67\ --------------------------------------------------------------------------- \67\ EEI Comments at 11-12. --------------------------------------------------------------------------- 52. Joint Commenters consider requiring balancing authorities and reserve sharing groups to address megawatt losses above the most severe single contingency as tantamount to requiring entities to operate to ``N-2'' or greater conditions. Joint Commenters assert that this would not only be expensive, estimating that doubling current contingency reserves across North America could cost $150-200 million/year based on average monthly cost of spinning reserves, it could adversely impact reliability. Joint Commenters state that N-2 events typically result from severe transmission events involving weather, major equipment or protection system failures. According to Joint Commenters, ``[i]n these situations, transmission security takes priority over maintaining ACE to zero. Excessive generation dispatch by [balancing authorities] could interfere with actions taken simultaneously by Transmission Operators and remote [balancing authorities] to resolve problems on the transmission system.'' \68\ --------------------------------------------------------------------------- \68\ Joint Commenters Comments at 9. --------------------------------------------------------------------------- 53. Joint Commenters explain that the available data reflecting experience with megawatt losses subject to currently-effective Reliability Standard BAL-002-1 indicates that concerns about a reliability gap are overstated. According to Joint Commenters, of the 95 events involving most severe single contingency exceedances from 2012 to 2015, 91 were recovered in less than 15 minutes, and there were no Interconnected Reliability Operating Limit (IROL) exceedances of over 30 minutes in 2015, ``which demonstrates that the grid was secure even while zero ACE was not achieved within 15 minutes.'' \69\ --------------------------------------------------------------------------- \69\ Id. at 8 (citing NERC's 2016 State of Reliability Report). --------------------------------------------------------------------------- 54. CEA and IESO also oppose requiring balancing authorities or reserve sharing groups to address [[Page 9001]] megawatt losses exceeding the most severe single contingency, which they describe as an ``open-ended requirement.'' \70\ CEA explains that it ``can severely affect a [balancing authority's] ability to suitably plan for potential contingency events. At an increased cost and at the expense of reduced market efficiency (more capacity is put aside for reserve as opposed to bidding into the energy market), a [balancing authority] could, in theory, design and operate to N-2, N-3 or greater events. However, this is simply not feasible.'' \71\ --------------------------------------------------------------------------- \70\ CEA Comments at 5; IESO Comments at 7. \71\ CEA Comments at 5-6. --------------------------------------------------------------------------- Commission Determination 55. The Commission remains concerned with relying on a ``coordinated suite of standards,'' as NERC maintains, to address reliability issues associated with megawatt losses above the most severe single contingency, considering that these other Reliability Standards do not specifically address restoration of ACE and Contingency Reserves. Further, the requirements for emergency Operating Plans in Reliability Standard EOP-011-1 do not specify any obligation for a balancing authority, transmission system operator, and/or reliability coordinator to take action to return ACE to zero for all operating conditions. 56. Additionally, Reliability Standards TOP-001-3, EOP-003-2, IRO- 008-2, and IRO-009-2 pertain to actions needed to prevent or mitigate SOLs/IROLs caused by transmission line loading and other responsibilities of the transmission system operator and reliability coordinator. These Reliability Standards do not specifically address the balancing authority's responsibility to recover ACE by balancing load and generation, the purpose of Reliability Standard BAL-002-2. 57. The Commission finds the arguments and historical data provided by commenters to be helpful regarding whether there is a need to expand the requirements of Reliability Standard BAL-002-2 to address most severe single contingency exceedances that do not cause energy emergencies, as contemplated in the NOPR. Nonetheless, we believe the comments do not fully resolve open questions regarding the potential reliability impact of suspending the focus on the balancing of demand and load and ACE recovery--the purpose of Reliability Standard BAL-002- 2--in exceedance scenarios. 58. The Commission determines that it is important to better understand the potential impacts of the approach taken in Reliability Standard BAL-002-2 when megawatt losses exceed the most severe single contingency without causing an energy emergency. Accordingly, we direct NERC to study the reliability risks associated with most severe single contingency exceedances that do not cause energy emergencies and submit a report with findings to the Commission two years from Reliability Standard BAL-002-2 implementation. D. Violation Risk Factor for Requirements R1 and R2 NERC Petition 59. NERC proposed a ``medium'' violation risk factor for each requirement of Reliability Standard BAL-002-2. NOPR 60. In the NOPR, the Commission expressed concern that NERC did not adequately justify lowering the assignment of the violation risk factor for Requirements R1 and R2 and proposed to direct that NERC assign a ``high'' violation risk factor to Reliability Standard BAL-002-2, Requirements R1 and R2. 61. Requirement R1 requires a balancing authority or reserve sharing group to deploy contingency reserves in response to all Reportable Balancing Contingency Events as the means for recovering Reporting ACE. Requirement R2 requires a balancing authority or reserve sharing group to develop, review and maintain a process within its Operating Plans for determining its most severe single contingency and to prepare to have contingency reserves equal to, or greater than, its most severe single contingency. Currently-effective Reliability Standard BAL-002-1 assigns a ``high'' violation risk factor for its Requirements R3 and R3.1, which NERC explained are analogous to proposed Requirements R1 and R2 in Reliability Standard BAL-002-2.\72\ --------------------------------------------------------------------------- \72\ NERC Petition, Ex. I (Mapping Document for BAL-002-2). --------------------------------------------------------------------------- 62. In the NOPR, the Commission stated that NERC provided insufficient support for the proposed violation risk factor for Requirements R1 and R2. In justifying the assignment of a ``medium'' violation risk factor NERC asserted, without explanation, that a ``medium'' violation risk factor is ``consistent with other reliability standards (i.e., BAL-001-2, BAL-003-1).'' \73\ NERC also contended, without explanation, that Requirement R3 is similar in concept to the current enforceable BAL-001-0.1a standard Requirements R1 and R2, which have an approved medium violation risk factor, and approved reliability standards BAL-001-1 and BAL-003-1.\74\ The conclusory statements in NERC's petition regarding the alleged similarities between Requirements R1 and R2 and other Reliability Standards, the NOPR stated, do not adequately explain the alleged bases for reducing the violation risk factor for Requirements R1 and R2 from the analogous Requirement R3 in the currently-effective Reliability Standard. --------------------------------------------------------------------------- \73\ NERC Petition, Ex. G (Analysis of Violation Risk Factors and Violation Severity Levels) at 4. \74\ Id. --------------------------------------------------------------------------- Comments 63. NERC, EEI and APS oppose raising the violation risk factor for Reliability Standard BAL-002-2 to ``high'' as proposed in the NOPR. NERC asserts that a failure to perform Requirements R1 and R2 ``in real time would produce results consistent with the Commission approved guidelines for a `Medium' [violation risk factor] VRF . . . [that is] unlikely to lead to Bulk Electric System instability, separation, or cascading failures.'' \75\ With regard to Requirement R1, NERC states that Reporting ACE ``is not an immediate measure of reliability, and the risk resulting from failure to meet Requirement R1'' is not likely to lead to instability, separation or cascading failures, the criteria for a high violation risk factor.\76\ Likewise, NERC asserts that a ``medium'' violation risk factor is appropriate for Requirement R2, because the process responsible entities use for developing and reviewing their most severe single contingency ``does not directly contribute to reliability.'' \77\ EEI agrees, adding that it ``also believes the medium VRF is justified because in most instances ACE is more reflective of commercial issues, particularly if frequency remains normal.'' \78\ --------------------------------------------------------------------------- \75\ NERC Comments at 28. \76\ Id. at 29. \77\ Id. at 30. \78\ EEI at 13. --------------------------------------------------------------------------- 64. APS also disagrees with the NOPR proposal because the Commission ``utilizes previous versions of reliability standards as a benchmark for the acceptability of VRFs [violation risk factors].'' \79\ APS states that it is ``concerned that the assignment of a VRF based solely on the previous VRF assignments may contravene the current NERC Rules of Procedure and associated processes.'' \80\ APS recommends that the Commission direct NERC to reevaluate [[Page 9002]] the VRFs for Reliability Standard BAL-002-2 ``against existing guidance.'' \81\ --------------------------------------------------------------------------- \79\ APS Comments at 11. \80\ Id. \81\ Id. --------------------------------------------------------------------------- Commission Determination 65. We adopt the NOPR proposal regarding the violation risk factor for Reliability Standard BAL-002-2, Requirements R1 and R2. According to the Commission-approved criteria, a ``high'' violation risk factor should be assigned to a Reliability Standard requirement if violating the requirement could ``directly cause or contribute to the Bulk Electric System instability, separation, or a cascading sequence of failures, or could place the Bulk Electric System at an unacceptable risk of instability, separation or cascading failures.'' Reliability Standard BAL-002-2, Requirement R1 requires responsible entities to recover Reporting ACE following the occurrence of a Reportable Balancing Contingency Event, which supports Interconnection frequency in real-time. 66. We disagree with NERC that significant real-time differences between actual and scheduled interchange, the imbalance that Requirement R1 is intended to address, do not fall within the scope of the criterion for a ``high'' violation risk factor. The need for the bulk electric system to stabilize after changes in system frequency is critical for real-time system operations. NERC asserts that the status of Reporting ACE ``is not indicative of an immediate vulnerability.'' \82\ We disagree. A violation of Requirement R1 jeopardizes system frequency, because it places the bulk electric system in a weakened operating condition with heightened risks of instability, separation, or cascading failures that could result from a second contingency. --------------------------------------------------------------------------- \82\ NERC Comments at 29. --------------------------------------------------------------------------- 67. With regard to Requirement R2, NERC acknowledges that actions under Requirement R2 ``support Requirement R1 by requiring responsible entities to develop, review, and maintain a process to determine the MSSC and to maintain, for deployment under Requirement R1, at least enough Contingency Reserve to cover the MSSC . . . [Requirement R2] is critical to the implementation of proposed Reliability Standard BAL- 002-2.'' \83\ Nonetheless, NERC asserts that Requirement R2 ``does not directly contribute to reliability.'' \84\ We disagree, and conclude that the fundamental connection between Requirements R1 and R2 creates a significant role in maintaining reliability. --------------------------------------------------------------------------- \83\ Id. at 29. \84\ Id. at 30. --------------------------------------------------------------------------- 68. Accordingly, we direct NERC to assign a ``high'' violation risk factor to Reliability Standard BAL-002-2, Requirements R1 and R2. V. Information Collection Statement 69. The Office of Management and Budget (OMB) regulations require that OMB approve certain reporting and recordkeeping (collections of information) imposed by an agency.\85\ Upon approval of a collection(s) of information, OMB will assign an OMB control number and expiration date. Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number. --------------------------------------------------------------------------- \85\ 5 CFR 1320.11. --------------------------------------------------------------------------- 70. The Commission is submitting these reporting and recordkeeping requirements to OMB for its review and approval under section 3507(d) of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507(d) (2012). The NOPR solicited comments on the Commission's need for this information, whether the information will have practical utility, the accuracy of the provided burden estimate, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing the respondent's burden, including the use of automated information techniques. No comments were received. 71. This final rule approves revisions to Reliability Standard BAL- 002-1. NERC states in its petition that the Reliability Standard applies to balancing authorities and reserve sharing groups, and is designed to ensure that these entities are able to recover from system contingencies by deploying adequate reserves to return their ACE to defined values and by replacing the capacity and energy lost due to generation or transmission equipment outages. The Commission also approves NERC's seven new definitions and one proposed revised definition, and the retirement of currently-effective Reliability Standard BAL-002-1 immediately prior to the effective date of BAL-002- 2. 72. Public Reporting Burden: Our estimate below regarding the number of respondents is based on the NERC Compliance Registry as of April 15, 2016. According to the NERC Compliance Registry, there are 70 balancing authorities in the Eastern Interconnection, 34 balancing authorities in the Western Interconnection and one balancing authority in the Electric Reliability Council of Texas (ERCOT). The Commission bases individual burden estimates on the time needed for balancing authorities and reserve sharing groups to maintain, annually, the operating process and operating plan that are required in the Reliability Standard. These burden estimates are consistent with estimates for similar tasks in other Commission-approved Reliability Standards. The following estimates relate to the requirements for this final rule in Docket No. RM16-7-000. --------------------------------------------------------------------------- \86\ Reliability Standard BAL-002-2 applies to balancing authorities and reserve sharing groups. However, the burden associated with the balancing authorities complying with Requirements R1and R3 is not included within this table because the Commission accounted for it under Commission-approved Reliability Standard BAL-002-1. \87\ The estimated hourly cost (salary plus benefits) of $96.71 is an average based on Bureau of Labor Statistics (BLS) information (http://www.bls.gov/oes/current/naics2_22.htm) for an electrical engineer ($64.29/hour) and a lawyer ($129.12). \88\ BA = Balancing Authority; RSG = Reserve Sharing Group. RM16-7-000 [BAL-002-2: Disturbance Control Standard--Contingency Reserve for recovery from a Balancing Contingency Event] \86\ -------------------------------------------------------------------------------------------------------------------------------------------------------- Annual number Average Total annual Number of of responses Total number burden hours burden hours Cost per respondents per of responses and cost per and total respondent respondent response \87\ annual cost ($) (1) (2) (1)*(2) = (3) (4) (3)*(4) = (5) (5)/(1) ------------------------------------------------------------------------------------------- BA/RSG: \88\ Develop and Maintain annually, Operating 105 1 105 8 840 $774 Process and Operating Plans................................ $774 $81,262 [[Page 9003]] BA/RSG: Record Retention \89\............................... 105 1 105 4 420 112 $112 $11,760 ------------------------------------------------------------------------------------------- Total................................................... .............. .............. 210 .............. 1,260 886 $93,022 -------------------------------------------------------------------------------------------------------------------------------------------------------- Title: FERC-725R, Mandatory Reliability Standard BAL-002-2. --------------------------------------------------------------------------- \89\ $28/hour, based on a Commission staff study of record retention burden cost. --------------------------------------------------------------------------- Action: Collection of Information. OMB Control No.: 1902-0268. Respondents: Businesses or other for-profit institutions; not-for- profit institutions. Frequency of Responses: On Occasion. Necessity of the Information: This final rule approves Reliability Standard BAL-002-2, which is designed to ensure that a responsible entity, either a balancing authority or reserve sharing group, is able to recover from system contingencies by deploying adequate reserves to return its ACE to defined values and replacing the capacity and energy lost due to generation or transmission equipment outages. Reliability Standard BAL-002-2, Requirement R1 requires a responsible entity, either a balancing authority or reserve sharing group, experiencing a Reportable Balancing Contingency Event to deploy its contingency reserves to recover its ACE to certain prescribed values within the Contingency Event Recovery Period of 15 minutes. Requirement R2 requires a balancing authority or reserve sharing group to develop, review and maintain a process within its Operating Plans for determining its most severe single contingency and prepare to have contingency reserves equal to, or greater than, its most severe single contingency. Requirement R3 provides that, following a Reportable Balancing Contingency Event, the responsible entity shall restore its Contingency Reserve to at least its most severe single contingency, before the end of the Contingency Reserve Restoration Period of 90 minutes. Internal Review: The Commission reviewed the Reliability Standard and has determined that it is necessary to implement section 215 of the FPA. The requirements of Reliability Standard BAL-002-2 should conform to the Commission's expectation for generation and demand balance throughout the Eastern and Western Interconnections as well as within the ERCOT Region. 73. Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email: [email protected], phone: (202) 502-8663, fax: (202) 273-0873]. VI. Environmental Analysis 74. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.\90\ The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended.\91\ The actions proposed here fall within this categorical exclusion in the Commission's regulations. --------------------------------------------------------------------------- \90\ Regulations Implementing the National Environmental Policy Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987). \91\ 18 CFR 380.4(a)(2)(ii). --------------------------------------------------------------------------- VII. Regulatory Flexibility Act 75. The Regulatory Flexibility Act of 1980 (RFA) \92\ generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. As shown in the information collection section, the Reliability Standard applies to 105 entities. Comparison of the applicable entities with the Commission's small business data indicates that approximately 23 \93\ are small business entities.\94\ Of these, the Commission estimates that approximately five percent, or one of these 23 small entities, will be affected by the new requirements of the Reliability Standard. --------------------------------------------------------------------------- \92\ 5 U.S.C. 601-612. \93\ 21.73 percent of the total number of affected entities. \94\ The Small Business Administration sets the threshold for what constitutes a small business. Public utilities may fall under one of several different categories, each with a size threshold based on the company's number of employees, including affiliates, the parent company, and subsidiaries. For the analysis in this final rule, we are using a 500 employee threshold for each affected entity. Each entity is classified as Electric Bulk Power Transmission and Control (NAICS code 221121). --------------------------------------------------------------------------- 76. The Commission estimates that the small entities affected by Reliability Standard BAL-002-2 will incur an annual compliance cost of up to $20,355 (i.e., the cost of developing, and maintaining annually operating process and operating plans), resulting in a cost of approximately $885 per balancing authority and/or reserve sharing group. These costs represent an estimate of the costs a small entity could incur if the entity is identified as an applicable entity. The Commission does not consider the estimated cost per small entity to have a significant economic impact on a substantial number of small entities. Accordingly, the Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. VIII. Document Availability 77. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page (http://www.ferc.gov) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 20426. 78. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of [[Page 9004]] this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number of this document, excluding the last three digits, in the docket number field. 79. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at [email protected], or the Public Reference Room at (202) 502- 8371, TTY (202) 502-8659. Email the Public Reference Room at [email protected]. IX. Effective Date and Congressional Notification 80. These regulations are effective April 3, 2017. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a ``major rule'' as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996. By the Commission. Issued: January 19, 2017. Nathaniel J. Davis, Sr., Deputy Secretary. Note: The following appendix will not appear in the Code of Federal Regulations. Appendix--Commenters ------------------------------------------------------------------------ Abbreviation Commenter ------------------------------------------------------------------------ APS.......................... Arizona Public Service Company. BPA.......................... Bonneville Power Administration. CEA.......................... Canadian Electricity Association. EEI.......................... Edison Electric Institute. Idaho Power.................. Idaho Power. IESO......................... Independent Electricity System Operator. Joint Commenters............. Alberta Electric System Operator, California Independent System Operator, Electric Reliability Council of Texas, Inc., Midcontinent Independent System Operator, Inc., PJM Interconnection, L.L.C., Southwest Power Pool, Inc., and IESO. Naturener.................... Naturener USA, LLC. NERC......................... North American Electric Reliability Corporation. NRECA........................ National Rural Electric Cooperative Association. TVA.......................... Tennessee Valley Authority. ------------------------------------------------------------------------ [FR Doc. 2017-02175 Filed 2-1-17; 8:45 am] BILLING CODE 6717-01-P
![8994 Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Rules and Regulations
Reliability, Federal Energy Regulatory return their Area Control Error to equipment outages.2 In addition, the
Commission, 888 First Street NE., defined values following a Reportable Commission approves eight new and
Washington, DC 20426, Telephone: Balancing Contingency Event. In revised definitions proposed by NERC
(202) 502–6593, Raymond.Orocco- addition, the Commission directs NERC for inclusion in the NERC Glossary and
John@ferc.gov. to develop modifications to Reliability the retirement of currently-effective
Julie Greenisen (Legal Information), Standard BAL–002–2 to address Reliability Standard BAL–002–1
Office of the General Counsel, Federal concerns regarding extensions of the 15- immediately prior to the effective date
Energy Regulatory Commission, 888 minute period for Area Control Error of Reliability Standard BAL–002–2. The
First Street NE., Washington, DC recovery and contingency reserve Commission also approves, with one
20426, Telephone: (202) 502–6362, restoration. The Commission also modification, Reliability Standard BAL–
julie.greenisen@ferc.gov. directs NERC to collect and report on 002–2’s associated violation risk factors
SUPPLEMENTARY INFORMATION: On June data regarding additional megawatt and violation severity levels, and
16, 2016, the Commission issued a final losses following Reportable Balancing implementation plan.
rule amending its regulations to require Contingency Events during the 2. Pursuant to section 215(d)(5) of the
NERC to provide the Commission, and Contingency Reserve Restoration Period FPA,3 the Commission directs NERC to
Commission staff, with access to certain and to study and report on the develop modifications to Reliability
databases compiled and maintained by reliability risks associated with Standard BAL–002–2, Requirement R1
NERC.1 The compliance date for the megawatt losses above the most severe to address concerns related to the
new regulation was deferred based on single contingency that do not cause potential reliability impact of repeated
issuance of the final rule in a related energy emergencies. extensions of the period for ACE
rulemaking, Commission Docket No. recovery. To address the concerns, the
DATES: This rule is effective April 3,
RM16–15–000. The final rule in the Notice of Proposed Rulemaking (NOPR)
2017. proposed directing that NERC modify
related proceeding has now been issued
and was published in the Federal FOR FURTHER INFORMATION CONTACT: the Reliability Standard to require
Register on December 21, 2016, to Enakpodia Agbedia (Technical reliability coordinator approval of
become effective February 21, 2017. Information), Office of Electric extensions of the ACE recovery period.
This document provides notice of the Reliability, Division of Reliability Numerous commenters opposed the
corresponding date for compliance with Standards, Federal Energy Regulatory proposal, arguing that the proposal has
the regulations adopted in Docket No. Commission, 888 First Street NE., the potential to complicate an already
RM15–25–000. Washington, DC 20426, Telephone: challenging situation. Thus, to address
(202) 502–6750, Enakpodia.Agbedia@ the underlying concern while cognizant
Kimberly D. Bose, ferc.gov. of the NOPR comments, the final rule
Secretary. Mark Bennett (Legal Information), adopts a different approach of directing
[FR Doc. 2017–02228 Filed 2–1–17; 8:45 am] Office of the General Counsel, Federal NERC to develop modifications to
BILLING CODE 6717–01–P Energy Regulatory Commission, 888 Reliability Standard BAL–002–2 that
First Street NE., Washington, DC 20426, would require an entity to provide
Telephone: (202) 502–8524, certain information to the reliability
DEPARTMENT OF ENERGY Mark.Bennett@ferc.gov. coordinator when the entity does not
timely recover ACE due to an
Federal Energy Regulatory SUPPLEMENTARY INFORMATION: intervening disturbance. As discussed
Commission ORDER NO. 835 below, the Commission also directs
NERC: (1) To collect and report on data
18 CFR Part 40 FINAL RULE related to resets of the contingency
[Docket No. RM16–7–000; Order No. 835] (Issued January 19, 2017) reserve restoration period; and (2) to
study and report on the reliability risks
1. Pursuant to section 215 of the associated with megawatt losses above
Disturbance Control Standard—
Federal Power Act (FPA),1 the an applicable entity’s most severe single
Contingency Reserve for Recovery
Commission approves Reliability contingency (MSSC) that do not cause
From a Balancing Contingency Event
Standard BAL–002–2 (Disturbance energy emergencies.
Reliability Standard
Control Standard—Contingency Reserve
AGENCY: Federal Energy Regulatory for Recovery from a Balancing I. Background
Commission, Department of Energy. Contingency Event). The North 3. Section 215 of the FPA requires a
ACTION: Final rule. American Electric Reliability Commission-certified ERO to develop
Corporation (NERC), the Commission- mandatory and enforceable Reliability
SUMMARY: The Commission approves certified Electric Reliability Standards that are subject to
Reliability Standard BAL–002–2 Organization (ERO), developed and Commission review and approval. The
(Disturbance Control Standard— submitted Reliability Standard BAL– Commission may approve, by rule or
Contingency Reserve for Recovery from 002–2 for Commission approval. order, a proposed Reliability Standard
a Balancing Contingency Event) Reliability Standard BAL–002–2 is or modification to a Reliability Standard
submitted by the North American intended to ensure that balancing
Electric Reliability Corporation (NERC). authorities and reserve sharing groups 2 ACE is the instantaneous difference between a
Reliability Standard BAL–002–2 is are able to recover from system balancing authority’s Net Actual and Scheduled
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designed to ensure that balancing contingencies by deploying adequate Interchange, taking into account the effects of
Frequency Bias, correction for meter error, and
authorities and reserve sharing groups reserves to return their Area Control Automatic Time Error Correction (ATEC), if
balance resources and demand and Error (ACE) to defined values and by operating in ATEC mode. ATEC is only applicable
replacing the capacity and energy lost to balancing authorities in the Western
1 Availability of Certain North American Electric Interconnection. NERC Glossary of Terms Used in
due to generation or transmission NERC Reliability Standards (NERC Glossary) at 7
Reliability Corporation Databases to the
Commission, Order No. 824, 155 FERC ¶ 61,275 (updated September 29, 2016).
(2016). 1 16 U.S.C. 824(o). 3 16 U.S.C. 824o(d)(5).
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if it determines that the Reliability that Reliability Standard BAL–002–2 is of 15 minutes.16 However, under certain
Standard is just, reasonable, not unduly just, reasonable, not unduly circumstances, Reliability Standard
discriminatory or preferential and in the discriminatory or preferential, and in BAL–002–2 relieves responsible entities
public interest.4 Once approved, the the public interest because it satisfies from strict compliance with the existing
Reliability Standards may be enforced the factors set forth in Order No. 672, time periods for ACE recovery and
by NERC, subject to Commission which the Commission applies when contingency reserve restoration ‘‘to
oversight, or by the Commission reviewing a proposed Reliability ensure responsible entities retain
independently.5 Pursuant to section 215 Standard.13 NERC also asserted that flexibility to maintain service to
of the FPA, the Commission established Reliability Standard BAL–002–2 Demand, while managing reliability,
a process to select and certify an ERO,6 addresses the outstanding directives and to avoid duplication with other
and subsequently certified NERC.7 from Order No. 693 regarding the use of Reliability Standards.’’ 17
4. On March 16, 2007, the demand side management as a resource 8. Specifically, Requirement R1, Part
Commission issued Order No. 693, for contingency reserve and the 1.3.1 provides that a balancing authority
approving 83 of the 107 Reliability development of a continent-wide or reserve sharing group is not subject
Standards filed by NERC, including contingency reserve policy. to Requirement R1, Part 1.1 if it: (1) Is
Reliability Standard BAL–002–0.8 In experiencing a Reliability Coordinator
6. Reliability Standard BAL–002–2
addition, pursuant to section 215(d)(5) declared Energy Emergency Alert Level;
consolidates six requirements in
of the FPA, the Commission directed the (2) is utilizing its contingency reserve to
currently-effective Reliability Standard
ERO to develop modifications to mitigate an operating emergency in
BAL–002–1 into three requirements and
Reliability Standard BAL–002–0: (1) To accordance with its emergency
is applicable to balancing authorities
include a requirement that explicitly Operating Plan, and (3) has depleted its
and reserve sharing groups. NERC stated
provides that demand side management contingency reserve to a level below its
that Reliability Standard BAL–002–2
may be used as a resource for most severe single contingency.
improves upon existing Reliability
contingency reserves; (2) to develop a 9. In addition, under Requirement R1,
Standard BAL–002–1 because ‘‘it
continent-wide contingency reserve Part 1.3.2, a balancing authority or
clarifies obligations associated with
policy; and (3) to refer to the ERO rather reserve sharing group is not subject to
achieving the objective of BAL–002 by
than the NERC Operating Committee in Requirement R1, Part 1.1 if the
streamlining and organizing the
Requirements R4.2 and R6.2.9 On balancing authority or reserve sharing
responsibilities required therein,
January 10, 2011, the Commission group experiences: (1) Multiple
enhancing the obligation to maintain
approved Reliability Standard BAL– Contingencies where the combined
reserves, and further defining events
002–1, which addressed the third megawatt (MW) loss exceeds its most
that predicate action under the
directive described above.10 severe single contingency and that are
standard.’’ 14 NERC also stated that
II. NERC Petition and Reliability Reliability Standard BAL–002–2 defined as a single Balancing
Standard BAL–002–2 ‘‘address[es] and supersede[s]’’ the Contingency Event or (2) multiple
proposed interpretation previously Balancing Contingency Events within
5. On January 29, 2016, NERC filed a the sum of the time periods defined by
petition seeking approval of Reliability submitted by NERC (i.e., of Reliability
Standard BAL–002–1a) and pending in the Contingency Event Recovery Period
Standard BAL–002–2; 11 eight new or and Contingency Reserve Restoration
revised definitions to be added to the Docket No. RM13–6–000.15
Period whose combined magnitude
NERC Glossary; and Reliability 7. Requirement R1 of BAL–002–2 exceeds the Responsible Entity’s most
Standard BAL–002–2’s associated requires a balancing authority or reserve severe single contingency.
violation risk factors and violation sharing group experiencing a Reportable 10. Requirement R2 provides that
severity levels, effective date, and Balancing Contingency Event to deploy each responsible entity:
implementation plan.12 NERC stated its contingency reserves to recover its
ACE to certain prescribed values within shall develop, review and maintain annually,
4 Id. 824o(d)(2). the Contingency Event Recovery Period and implement an Operating Process as part
5 Id. 824o(e). of its Operating Plan to determine its Most
6 Rules Concerning Certification of the Electric Severe Single Contingency and to make
Balancing Contingency Event, Contingency Event preparations to have Contingency Reserve
Reliability Organization; and Procedures for the Recovery Period, Contingency Reserve Restoration
Establishment, Approval, and Enforcement of equal to, or greater than the Responsible
Period, Pre-Reporting Contingency Event ACE
Electric Reliability Standards, Order No. 672, FERC Value, Reserve Sharing Group Reporting ACE, and
Entity’s Most Severe Single Contingency
Stats. & Regs. ¶ 31,204, order on reh’g, Order No. Contingency Reserve. NERC Petition at 28–34. available for maintaining system reliability.
672–A, FERC Stats. & Regs. ¶ 31,212 (2006). 13 NERC Petition at 13 and Ex. F (Order No. 672
7 North American Electric Reliability Corp., 116
Criteria). 16 NERC proposes to define Reportable Balancing
FERC ¶ 61,062, order on reh’g and compliance, 117 14 Id. at 13. Contingency Event as: ‘‘Any Balancing Contingency
FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa, Inc. 15 Id. at 1. On February 12, 2013, NERC filed a Event occurring within a one-minute interval of an
v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
8 Mandatory Reliability Standards for the Bulk- proposed interpretation of Reliability Standard initial sudden decline in ACE based on EMS scan
BAL–002–1 that construed the Reliability Standard rate data that results in a loss of MW output less
Power System, Order No. 693, FERC Stats. & Regs. than or equal to the Most Severe Single
so that the 15-minute ACE recovery period would
¶ 31,242, order on reh’g, Order No. 693–A, 120 Contingency, and greater than or equal to the lesser
not apply to events of a magnitude exceeding an
FERC ¶ 61,053 (2007). amount of: (i) 80% of the Most Severe Single
9 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at
entity’s most severe single contingency. In a NOPR
issued on May 16, 2013, the Commission proposed Contingency, or (ii) the amount listed below for the
P 356. to remand the proposed interpretation on applicable Interconnection. Prior to any given
10 North American Electric Reliability Corp., 134
procedural grounds. Electric Reliability calendar quarter, the 80% threshold may be
FERC ¶ 61,015 (2011).
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Organization Interpretation of Specific reduced by the responsible entity upon written
11 Reliability Standard BAL–002–2 is available on notification to the Regional Entity.’’ NERC Petition
Requirements of the Disturbance Control
the Commission’s eLibrary document retrieval Performance Standard, 143 FERC ¶ 61,138 (2013). at 30. Contingency Event Recovery Period, as
system in Docket No. RM16–7–000 and on the The rulemaking on the proposed interpretation is proposed by NERC, means: ‘‘A period that begins
NERC Web site, www.nerc.com. pending. In the petition in the immediate at the time that the resource output begins to
12 The eight proposed new and revised definitions proceeding, NERC states that, upon approval of decline within the first one-minute interval of a
for inclusion in the NERC Glossary are for the Reliability Standard BAL–002–2, NERC will file a Reportable Balancing Contingency Event, and
following terms: Balancing Contingency Event, notice of withdrawal of the proposed interpretation. extends for fifteen minutes thereafter.’’ Id. at 32.
Most Severe Single Contingency, Reportable NERC Petition at 1. 17 Id. at 4.
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NERC explained that Requirement R2 a resource for contingency reserve when those other Reliability Standards are
requires responsible entities to necessary.’’ 22 better designed to manage the greater
demonstrate that their process for 13. NERC submitted proposed risks created by such events.26
calculating their most severe single violation risk factors and violation
severity levels for each requirement of III. Notice of Proposed Rulemaking
contingency ‘‘surveys all contingencies,
including single points of failure, to Reliability Standard BAL–002–2 and an 16. On May 19, 2016, the Commission
identify the event that would cause the implementation plan and effective issued a NOPR proposing to approve
greatest loss of resource output used by dates. NERC stated that these proposals Reliability Standard BAL–002–2 as just,
the [reserve sharing group or balancing were developed and reviewed for reasonable, not unduly discriminatory
authority] to meet Firm Demand.’’ 18 consistency with NERC and or preferential and in the public
NERC further stated that Requirement Commission guidelines. NERC proposed interest.27 The Commission also
R2 supports Requirements R1 and R3 in an effective date for Reliability Standard proposed to approve NERC’s eight
Reliability Standard BAL–002–2 ‘‘as BAL–002–2 that is the first day of the proposed new and revised definitions
these requirements rely on proper first calendar quarter that is six months and the retirement of currently-effective
calculation of [most severe single after the date of Commission approval. Reliability Standard BAL–002–1.
contingency].’’ 19 NERC explained that this Further, the Commission proposed to
11. Requirement R3 provides that implementation date will allow entities direct NERC to change the proposed
‘‘each Responsible Entity, following a to make necessary modifications to violation risk factor from ‘‘medium’’ to
Reportable Balancing Contingency existing software programs to ensure ‘‘high’’ for Reliability Standard BAL–
Event, shall restore its Contingency compliance.23 002–2, Requirements R1 and R2.
Reserve to at least its Most Severe Single 14. On February 12, 2016, NERC 17. In the NOPR, the Commission
Contingency, before the end of the submitted a supplemental filing to recognized that it is essential for grid
Contingency Reserve Restoration Period clarify a statement in the petition that reliability that responsible entities
[90 minutes], but any Balancing Reliability Standard BAL–002–2 would balance resources and demand and
Contingency Event that occurs before operate in conjunction with Reliability restore system frequency to recover from
the end of a Contingency Reserve Standard TOP–007–0 to control system a system event, and that they maintain
Restoration Period resets the beginning frequency by addressing transmission reserves necessary to replace capacity
of the Contingency Event Recovery line loading in the event of a and energy lost due to generation or
Period.’’ transmission overload. NERC explained transmission outages. The Commission
12. NERC explained that the revised that, while Reliability Standard TOP– also stated that Reliability Standard
language in the consolidated 007–0 will be retired on April 1, 2017, BAL–002–2 improves upon currently-
requirements in Reliability Standard ‘‘the obligations related to [transmission effective Reliability Standard BAL–002–
BAL–002–2 will improve efficiency and line loading] under TOP–007–0 will be 1 by consolidating requirements to
clarity by removing ‘‘unnecessary covered by Commission-approved TOP– streamline and clarify the obligations
entities from compliance to capture only 001–3, EOP–003–2, IRO–009–2, and related to achieving these goals.
those entities that are vital for IRO–008–2 . . . by requiring relevant However, the Commission raised
reliability.’’ 20 NERC stated that the new functional entities to communicate concerns regarding possible extensions
definitions for Balancing Contingency [Interconnection Reliability Operating of the 15-minute ACE recovery period
Event and Reportable Balancing Limits (IROL)] and [System Operating and the 90-minute Contingency Reserve
Contingency Event more clearly identify Limits (SOL)] exceedances so that the Restoration Period, as well as NERC’s
the types of events that cause frequency [reliability coordinator] can direct proposal to limit the scope of Reliability
deviations necessitating action under appropriate corrective action to mitigate Standard BAL–002–2 to a responsible
Reliability Standard BAL–002–2 and or prevent those events.’’ 24 entity’s most severe single contingency.
provide additional detail regarding the 15. On March 31, 2016, NERC 18. In the NOPR, the Commission
types of resources that may be identified submitted a second supplemental filing sought comment on the following
as contingency reserves. Furthermore, to ‘‘further clarify the extent to which issues: (1) Reliability coordinator
NERC stated that Reliability Standard BAL–002–2 interacts with other authorization of extensions of the 15-
BAL–002–2 ‘‘ensures objectivity of the Commission-approved Reliability minute ACE recovery period; (2) resets
reserve measurement process by Standards to promote Bulk Power or credits during the 90-minute
guaranteeing a Commission-sanctioned System reliability . . . [and support] the Contingency Reserve Restoration Period;
continent-wide reserve policy,’’ and overarching policy objective reflected in (3) the exclusion of megawatt losses
therefore satisfies an outstanding Order the stated purpose of Reliability above the most severe single
No. 693 directive for uniform elements, Standard BAL–002–2.’’ 25 In its filing, contingency in the proposed definition
definitions and requirements for a NERC expanded upon the explanation of Reportable Balancing Contingency
continent-wide contingency reserve in the petition regarding how an Event; and (4) NERC’s proposal to
policy.21 Finally, NERC asserted that the ‘‘integrated’’ and ‘‘coordinated suite of reduce from ‘‘high’’ to ‘‘medium’’ the
revised definition of Contingency Reliability Standards’’ (BAL–001–2, violation risk factor for proposed
Reserves ‘‘improves the existing BAL–003–1, TOP–007–0, EOP–002–3, Requirements R1 and R2. The
definition by addressing a Commission EOP–011–1, IRO–008–2, and IRO–009– Commission also sought comment on
directive in Order No. 693 to allow 2) will apply to events causing MW whether NERC’s proposed definition of
demand side management to be used as losses above a responsible entity’s most contingency reserve should include the
severe single contingency, and how NERC-defined term Demand-side
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18 Id. at 25. Management.
19 Id. 22 Id. at 33.
NERC provides examples of how
responsible entities may calculate the most severe 23 NERC Petition, Ex. D (Implementation Plan) at 26 Id. at 2–5.
single contingency in the petition. See NERC 3. 27 Disturbance Control Standard—Contingency
Petition, Ex. B (Calculating Most Severe Single 24 NERC February 12, 2016 Supplemental Filing Reserve for Recovery from a Balancing Contingency
Contingency). at 2–3. Event Reliability Standard, Notice of Proposed
20 NERC Petition at 14. 25 NERC March 31, 2016 Supplemental Filing at Rulemaking, 81 FR 33,441 (May 26, 2016), 155
21 Id. 1, 5. FERC ¶ 61,180 (2016) (NOPR).
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19. In response to the NOPR, the Standard BAL–002–2 to address our Further, the Reliability Standard does
Commission received 11 sets of concerns, discussed below, regarding not expressly provide a definitive and
comments. We address below the issues the 15-minute ACE recovery period set enforceable deadline for ACE recovery
raised in the NOPR and comments. The forth in Requirement R1. We also direct during a reliability coordinator-declared
Appendix to this final rule lists the NERC to collect and report on data Energy Emergency Alert accompanied
entities that filed comments in response pertaining to the occurrence of by the depletion of the entity’s
to the NOPR. Balancing Contingency Events that contingency reserves to below its most
trigger resets of the 90-minute severe single contingency.
IV. Discussion
Contingency Reserve Restoration Period
20. Pursuant to FPA section 215(d)(2), 27. The Commission stated that
under Requirement R3. We further
we approve Reliability Standard BAL– NERC’s explanation for relief from the
direct NERC to study and submit a
002–2 as just, reasonable, not unduly 15-minute ACE recovery period in
report to the Commission with findings
discriminatory or preferential, and in Reliability Standard BAL–002–2 raises
regarding reliability risks associated
the public interest. We also approve with most severe single contingency concerns, because it is unclear how or
NERC’s eight new and revised proposed exceedances that do not result in energy when an entity will prepare for a second
definitions and, with one exception, the emergencies. contingency during the indeterminate
proposed violation risk factor and 24. We discuss below the following extension of the 15-minute ACE
violation severity level assignments. In issues raised in the NOPR and recovery period that Requirement R1,
addition, we approve NERC’s addressed in the comments: (A) Part 1.3 permits. The Commission
implementation plan establishing an Whether a reliability coordinator must observed that a balancing authority that
effective date of the first day of the first expressly authorize extensions of the is operating out-of-balance for an
calendar quarter, six months after the 15-minute ACE recovery period; (B) extended period of time is ‘‘leaning on
date of Commission approval, and the whether BAL–002–2 should be modified the system’’ by relying on external
retirement of currently-effective BAL– to require all contingency reserves to be resources to meet its obligations. That
002–1 immediately before that date.28 restored within the 90-minute could affect other entities within an
21. The purpose of Reliability Contingency Reserve Restoration Period; Interconnection, particularly if another
Standard BAL–002–2 is to ensure that (C) whether a reasonable obligation entity is reacting to a grid event while
balancing authorities and reserve should be imposed for balancing unaware that the first entity has not
sharing groups balance resources and authorities and reserve sharing groups restored its ACE.33 While an extension
demand and return their ACE to defined to address scenarios involving megawatt of the 15-minute ACE recovery period
values following a Reportable Balancing losses above the most severe single may be appropriate under certain
Contingency Event. We determine that contingency that do not cause energy emergency conditions, the NOPR
Reliability Standard BAL–002–2 emergencies; and (D) NERC’s proposal explained that, with a wide-area view
improves upon currently-effective to reduce from ‘‘high’’ to ‘‘medium’’ the and superior information and
Reliability Standard BAL–002–1 by violation risk factor for Requirements R1 objectivity, the reliability coordinator is
consolidating the number of and R2. in a better position to decide whether to
requirements to streamline and clarify extend the ACE recovery period after an
A. The 15-Minute ACE Recovery Period entity has met the criteria described in
the obligations for responsible entities
to deploy contingency reserves to NERC Petition Requirement R1, Part 1.3.1.
stabilize system frequency in response 25. In its petition, NERC stated that 28. Further, while Reliability
to system contingencies. the ‘‘exemption’’ from the 15-minute Standard EOP–011–1, Requirement R3,
22. We conclude that BAL–002–2 ACE recovery period in Requirement requires the reliability coordinator to
satisfies the Order No. 693 directive that R1, Part 1.3.1 ‘‘eliminates the existing review balancing authority Operating
NERC develop a continent-wide conflict with EOP–011–1, as it removes Plans and notify a balancing authority of
contingency reserve policy.29 Also, we undefined auditor discretion when any ‘‘reliability risks’’ the reliability
accept NERC’s explanation in response assessing compliance and allows the coordinator may identify with a time
to the NOPR that demand side resources responsible entity flexibility to maintain frame for the resubmittal of revised
that are technically capable can be service to load while managing Operating Plans, the NOPR explained
included as contingency reserves, and reliability.’’ 31 NERC explained that this that the Reliability Standard does not
therefore determine that Reliability exemption does not eliminate an require reliability coordinator approval
Standard BAL–002–2 satisfies the Order entity’s obligation to respond to a of Operating Plans.
No. 693 directive that demand side Reportable Balancing Contingency
management may be used as a resource 29. Therefore, the NOPR proposed to
Event, but rather it will ‘‘simply allow direct NERC to develop modifications to
for contingency reserves.30 more time to return the Reporting ACE
23. In addition, pursuant to section Reliability Standard BAL–002–2 that
to the defined limits than would would require Reporting ACE recovery
215(d)(5) of the FPA, we direct NERC to otherwise be allowed.’’ 32
develop modifications to Reliability within the 15-minute Contingency
NOPR Event Recovery Period unless the
28 NERC Petition, Ex. D (Implementation Plan) at 26. In the NOPR, the Commission relevant reliability coordinator
3. noted that Reliability Standard BAL– expressly authorizes an extension of the
29 Order No. 693, FERC Stats. & Regs ¶ 31,242 at
002–2, Requirement R1 obligates a 15-minute ACE recovery period after the
PP 340, 341 and 356. balancing authority has met the criteria
responsible entity that experiences a
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30 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at
Reportable Balancing Contingency described in Requirement R1, Part 1.3.1.
PP 330, 335 and 356. In its comments NERC
explained that ‘‘[t]he proposed definition balances Event to return its Reporting ACE to pre- The Commission’s proposal included
the need for flexibility to include a variety of defined values within the 15-minute modifying Reliability Standard BAL–
demand side resources in measurements of
Contingency Event Recovery Period. 002–2 to identify the reliability
Contingency Reserve with the need to define the coordinator as an Applicable Entity.
types of demand side resources that are ‘technically
31 NERC Petition at 22.
capable’ to serve as contingency reserve.’’ NERC
Comments at 30. 32 Id. at 24. 33 NOPR, 155 FERC ¶ 61,180 at P 22.
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Comments activities occupying the [reliability first entity has not restored its ACE.
30. NERC, EEI, NRECA, TVA, CEA, coordinator’s] attention. Requiring the Accordingly, to address our concern
Joint Commenters, IESO and APS [balancing authority] and [reliability without requiring reliability coordinator
oppose the proposed directive. NERC coordinator] to conduct a conference authorization, we adopt APS’s proposed
asserts that the proposed directive is call during an EEA to discuss the merits alternative that would require a
unnecessary because the Balancing of requests for additional ACE recovery balancing authority or reserve sharing
Authority ACE Limit (BAAL) and a time only complicates these already- group experiencing a depletion of
balancing authority’s resource challenging conditions.’’ 39 contingency reserves below its most
obligations under Reliability Standard 33. While supporting the notification severe single contingency level during
BAL–001–2 discourage balancing and involvement of reliability an Energy Emergency Alert to obtain an
authorities from leaning on the system coordinators, APS shares Joint extension of the 15-minute ACE
during extensions of the Contingency Commenters’ concern that requiring recovery period by informing the
Event Recovery Period. NERC explains reliability coordinators to expressly reliability coordinator of the
that the BAAL: authorize extensions of the 15-minute circumstances and providing it with an
ACE recovery period could distract ACE recovery plan and target time
is a unique limit on a [balancing authority’s] period.
responsible entities from focusing on
Reporting ACE based on Real-time 36. We are persuaded that APS’s
interconnection frequency levels . . . since ‘‘maintaining and recovering the
the loss of a resource would influence the reliability of the [bulk electric approach is reasonable and adequately
Interconnection’s frequency, the BAAL system].’’ 40 Therefore, as an alternative addresses concerns with extensions of
would adjust (or ‘tighten’) to assure that the to the NOPR proposal, APS proposes the 15-minute ACE recovery period. By
Interconnection frequency remains in a safe that balancing authorities obtain requiring notification of reliability
range. The [balancing authority] must return extensions of the 15-minute ACE coordinators and providing the
its operations to within the ‘tightened’ BAAL recovery period under the extenuating reliability coordinator with an ACE
within 30 minutes and thus would not be recovery plan and target time period, we
able to ‘lean’ on the Interconnection for any circumstances described in Requirement
R1, Part 1.3.1 by notifying the reliability agree that the APS proposal ‘‘would
prolonged period.34
coordinator of the conditions within its allow appropriate flexibility to
31. Further, NERC contends that the area and providing the reliability [balancing authorities] when
proposed role for reliability coordinator with an ACE recovery plan extenuating circumstances are present
coordinators is unnecessary—in both and target time period, but without while providing [reliability
emergency and non-emergency obtaining express approval from the coordinators] with the necessary data,
situations—because the reliability reliability coordinator.41 communication, and coordination to
coordinator ‘‘must maintain constant 34. Idaho Power and BPA support the fulfill their oversight responsibilities to
oversight of reliability within its Commission’s proposal to expressly the Interconnection.’’ 43
[reliability coordinator] area and direct require reliability coordinator 37. Accordingly, we direct NERC to
other responsible entities to take actions authorization for extensions of the 15- develop modifications to Reliability
necessary to maintain reliability.’’ 35 minute Reporting ACE recovery period. Standard BAL–002–2, Requirement R1
32. EEI and Joint Commenters assert to require balancing authorities or
Idaho power agrees with ‘‘shifting more
that the NOPR proposal ‘‘would result reserve sharing groups: (1) To notify the
oversight to the Reliability Coordinator’’
in unnecessary duplication of reliability coordinator of the conditions
as the entity with the system-wide
requirements adding no tangible benefit set forth in Requirement R1, Part 1.3.1
view.42
to reliability while needlessly increasing preventing it from complying with the
the compliance burden.’’ 36 Joint Commission Determination 15-minute ACE recovery period; and (2)
Commenters also note the infrequent 35. We are persuaded by the to provide the reliability coordinator
nature of multiple-contingency events commenters not to adopt the NOPR with its ACE recovery plan, including a
and Energy Emergency Alerts (EEAs), proposal that would require reliability target recovery time. NERC may also
describing them as ‘‘exceptional coordinator authorization to extend the propose an equally efficient and
circumstances appropriate for an 15-minute ACE recovery period. As effective alternative.
exemption from the typical measured commenters explain, seeking the B. The 90-Minute Contingency Reserve
requirements.’’ 37 Joint Commenters proposed reliability coordinator Restoration Period
state that in 2015 there were ten EEA authorization while recovering from a
Level 2 and Level 3 events, and that disturbance has the potential to NERC Petition
‘‘most [balancing authorities] experience complicate an already-challenging 38. Reliability Standard BAL–002–2,
no EEA events in a given year . . . situation. However, we continue to see Requirement R3 requires a balancing
allowing recovery exceptions during a need to address the underlying authority or reserve sharing group to
these exceptional circumstances would concern expressed in the NOPR that a restore its contingency reserves to at
not create significant risk with respect balancing authority that is operating least its most severe single contingency
to ACE recovery responsibilities.’’ 38 out-of-balance for an extended period of before the end of the 90-minute
Joint Commenters also contend that in time is ‘‘leaning on the system’’ by Contingency Reserve Restoration
a ‘‘multiple-contingency event or during relying on external resources to meet its Period.44 Requirement R3 also provides
an EEA, there are likely scores of obligations. That scenario could affect for an automatic ‘‘reset’’ of the 90-
other entities within an Interconnection,
34 NERC Comments at 10.
particularly if another entity is reacting
mstockstill on DSK3G9T082PROD with RULES
43 APS Comments at 8.
35 Id. at 11 (citing Reliability Standards EOP– 44 NERC Petition, Ex. D (Implementation Plan).
0011–1, EOP–003–2, IRO–001–4, IRO–002–4, IRO– to a grid event while unaware that the
The 90-minute contingency reserve restoration
008–2, and IRO–009–2). period begins after the end of the 15-minute ACE
36 EEI Comments at 7; see also Joint Commenters 39 Id. at 3. restoration period under Requirement R1.
Comments at 2–4. 40 APS Comments at 4–5. Accordingly, responsible entities must restore
37 Joint Commenters Comments at 4. 41 Id. at 5.
contingency reserves within 105 minutes of the
38 Id. (citing NERC’s 2016 State of Reliability 42 Idaho Power Comments at 2; see also BPA occurrence of a Reportable Balancing Contingency
Report at 38). Comments at 3. Event to comply with Requirement R3.
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minute restoration period based upon reserve sharing groups would still be accurately quantify the actual MW loss,
any Balancing Contingency Event that required to actively restore contingency it may be required to take extreme
occurs during the restoration period.45 reserves even after experiencing a actions, including shedding firm load,
Balancing Contingency Event during the simply to meet the 90-minute
NOPR
90-minute restoration period. Such contingency recovery requirement.’’ 57
39. In the NOPR, the Commission events, according to NERC, ‘‘would Joint Commenters claim that the
proposed to direct NERC to modify merely extend the Contingency Reserve ‘‘likelihood of such an occurrence of
Reliability Standard BAL–002–2 to Restoration Period to ensure that the multiple independent generation losses
‘‘eliminate the potential for unlimited responsible entity has adequate time to absent a catastrophic transmission
resets and ensure that contingency recover from consecutive losses.’’ 50 failure is also very low.’’ 58 Joint
reserves must be restored within the 90- NERC asserts that the Commission’s Commenters state that on average, one
minute Contingency Reserve Restoration proposed credit approach ‘‘would be generator is lost in the Eastern
Period.’’ 46 The Commission sought confusing and burdensome, and it may Interconnection every 7 to 8 days, and
comment on a possible alternative that attract attention away from full and final ‘‘the probability of four random large
would give a balancing authority or restoration of the Contingency generator trips in the Eastern
reserve sharing group ‘‘credits’’ for Reserve.’’ 51 EEI agrees, adding that, ‘‘in Interconnection in a two hour period
megawatt losses resulting from light of existing standards, this concern was one in 350 years.’’ 59
Balancing Contingency Events during does not pose a sufficient risk to system 43. BPA and Idaho Power support the
the 90-minute restoration period, and reliability to merit NERC developing Commission’s proposal to require
allow an additional 90 minutes to modifications to the standard.’’ 52 balancing authorities to restore
restore reserves related to those 41. IESO and CEA claim that contingency reserves within the 90-
megawatt losses.47 modifications to Reliability Standard minute Contingency Event Recovery
Comments BAL–002–2, Requirement R1 to Period and receive ‘‘credits’’ for
eliminate the potential for unlimited megawatt losses during the Contingency
40. NERC, EEI, NRECA, CEA, Joint resets are unnecessary. IESO questions Event Recovery Period. TVA believes
Commenters, IESO and APS support the concern about unlimited resets of the potential for unlimited resets of the
approval of Requirement R3 as filed. the Contingency Reserve Restoration 90-minute restoration period is
NERC asserts that, because of resource Period, stating that it ‘‘would suggest ‘‘extremely remote,’’ but TVA supports
limitations and the potential that multiple resource loss events could the credit proposal as a ‘‘reasonable
compliance exposure to other Reliability somehow benefit or unburden a approach’’ for managing multiple events
Standards, including the Reporting ACE [balancing authority’s] obligation to during a contingency restoration period.
recovery requirements in Reliability restore the reserve level . . . [rather] the
Standard BAL–001–2, entities will not Commission Determination
infrequent event of a reset occurrence is
experience unlimited resets of the 90- more appropriately viewed as simply 44. The Commission determines not
minute restoration period.48 NERC not applying double jeopardy to a to adopt the NOPR proposal that NERC
explains that ‘‘[i]f an entity continues to [balancing authority] that is already in modify Reliability Standard BAL–002–2
trip units before full recovery of other a troubled situation.’’ 53 IESO further to establish a firm requirement that
units, the responsible entity would states that a reset of the contingency responsible entities must restore
eventually fail to meet obligations under reserve restoration period ‘‘will simply contingency reserves within the 90-
other Reliability Standards (including provide the opportunity for the involved minute Contingency Reserve Restoration
the requirement to recover ACE within balancing authority to reassess the Period. Based on the comments, we are
15 minutes under proposed BAL–002–2) situation and act accordingly to satisfied that occurrences of multiple
and may eventually enter into an replenish the contingency reserve’’ to Balancing Contingency Events during
Emergency situation under [reliability comply with BAL–002–2.54 Both IESO the 90-minute restoration period are rare
coordinator] oversight . . .’’ 49 NERC and CEA assert that balancing and would be temporally bounded by
states that balancing authorities and authorities ‘‘have a strong track record the Reporting ACE recovery
of acting in good faith.’’ 55 CEA also requirements in Reliability Standard
45 Balancing Contingency Event means: ‘‘Any
notes that ‘‘since a [balancing authority] BAL–001–2. We also acknowledge
single event described in Subsections (A), (B), or (C) NERC’s comment that intervening
below, or any series of such otherwise single events, does not own any resources, it cannot
with each separated from the next by one minute trigger or otherwise intentionally cause Balancing Contingency Events do not
or less. an additional loss of resource during the relieve balancing authorities and reserve
A. Sudden loss of generation: 90-minute period in order to reset the sharing groups of their obligation to
a. Due to recovery period.’’ 56 restore contingency reserves by the end
i. unit tripping, 42. Joint Commenters also oppose the of the reset period. Further, we
ii. loss of generator Facility resulting in isolation
of the generator from the Bulk Electric System or Commission’s proposal, explaining that acknowledge Joint Commenters’
from the responsible entity’s System, or ‘‘following a unit trip that results in a concern that determining the amount of
iii. sudden unplanned outage of transmission [Balancing Contingency Event], the megawatt losses to ‘‘credit’’ could be a
Facility; generator’s telemetry is often invalid or distraction from the contingency reserve
b. And, that causes an unexpected change to the suspect for some time, and if the restoration effort, and the benefits from
responsible entity’s ACE;
[balancing authority] is unable to the proposed ‘‘credit’’ approach could
B. Sudden loss of an import, due to unplanned
outage of transmission equipment that causes an be offset by unnecessary load shedding
unexpected imbalance between generation and 50 Id. at 16. caused by potential confusion and
mstockstill on DSK3G9T082PROD with RULES
Demand on the Interconnection. 51 Id. at 18–19.
C. Sudden restoration of a Demand that was used 52 EEI Comments at 8. 57 Joint Commenters Comments at 5.
as a resource that causes an unexpected change to 53 IESO Comments at 4–5. 58 Id.
the responsible entity’s ACE.’’ NERC Petition Ex. D. 54 Id. at 5; see also CEA Comments at 5. 59 Joint Commenters Comments at 6 (citing a
46 NOPR, 155 FERC ¶ 61,180 at P 29. 55 CEA Comments at 5; see also IESO Comments
probability analysis performed during the
47 Id. PP 27–29.
at 5. Reliability Standard BAL–003–1 development
48 NERC Comments at 17–18. 56 CEA Comments at 4; see also IESO Comments process using frequency event data for January 2006
49 Id. at 17. at 5. to September 2012).
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uncertainties associated with its warrant the proposed limitation on 51. EEI agrees with NERC, and also
implementation. Reliability Standard BAL–002–2.62 notes that exceedances of the most
45. While, as stated in the NOPR, Further, while recognizing the severe single contingency that do not
under some circumstances, extensions protections that the related set of create energy emergencies generally
of the 90-minute Contingency Reserve Reliability Standards may provide in raise commercial, not reliability, issues.
Restoration Period may be appropriate, extreme circumstances, the Commission Further, EEI asserts that tightening
the comments do not fully address the noted that megawatt exceedances of the Reliability Standard BAL–002–2 by
concern expressed in the NOPR with most severe single contingency that do requiring balancing authorities to
resets resulting from additional not cause energy emergencies or address megawatt losses above the most
megawatt losses following a Reportable otherwise implicate the set of Reliability severe single contingency ‘‘could have
Balancing Contingency Event. Standards cited by NERC could result in unintended consequences that limit the
Therefore, although we determine not to a reliability gap; they also could create flexibility of the [reliability
direct modifications to the Reliability the potential for balancing authorities to coordinators] and [balancing
Standard, we conclude that the lean on the Interconnection by authorities] to work together under the
automatic reset provision of Reliability indefinitely relying on neighboring existing suite of standards to address
Standard BAL–002–2, Requirement R3 balancing authorities’ resources.63 such complex situations . . .’’ 67
should be monitored for potential 49. In the NOPR, the Commission did 52. Joint Commenters consider
problems. not propose a specific approach but, requiring balancing authorities and
46. Accordingly, the Commission rather, sought comment on how to reserve sharing groups to address
directs NERC to collect and report data address this possible reliability gap and megawatt losses above the most severe
pertaining to: (1) Additional megawatt whether to impose a reasonable single contingency as tantamount to
losses following Reportable Balancing obligation for balancing authorities and requiring entities to operate to ‘‘N–2’’ or
Contingency Events during the reserve sharing groups to address greater conditions. Joint Commenters
Contingency Reserve Restoration Period; scenarios involving megawatt losses assert that this would not only be
and (2) the time periods for contingency above the most severe single expensive, estimating that doubling
reserve restoration under Requirement contingency that do not cause energy current contingency reserves across
R3 and the number of resets of the 90- emergencies. The NOPR stated that, North America could cost $150–200
minute restoration period, and submit a based on the comments, the million/year based on average monthly
report to the Commission two years Commission may direct that NERC cost of spinning reserves, it could
following the first day of develop a new or modified Reliability adversely impact reliability. Joint
implementation of Requirement R3. Standard to address that reliability Commenters state that N–2 events
After NERC reports on the data in a gap.64 typically result from severe
compliance filing, the Commission will transmission events involving weather,
consider what further action, if any, to Comments
major equipment or protection system
take. 50. NERC, EEI, NRECA, TVA, BPA, failures. According to Joint
CEA, Joint Commenters, IESO, and APS Commenters, ‘‘[i]n these situations,
C. Exclusion of Megawatt Losses Above assert that concerns about a possible
the Most Severe Single Contingency transmission security takes priority over
reliability gap are unfounded and urge maintaining ACE to zero. Excessive
NERC Petition the Commission to approve Reliability generation dispatch by [balancing
47. NERC’s definition of Reportable Standard BAL–002–2 as filed. NERC authorities] could interfere with actions
Balancing Contingency Event limits maintains that the limitation on the taken simultaneously by Transmission
balancing authority and reserve sharing scope of Reliability Standard BAL–002–
Operators and remote [balancing
group responsibility to megawatt losses 2 will not create a reliability gap and
authorities] to resolve problems on the
between 80 percent and 100 percent of reasserts its view that an integrated,
transmission system.’’ 68
their most severe single contingency coordinated suite of Reliability 53. Joint Commenters explain that the
that occur within a one minute Standards ‘‘will address important available data reflecting experience with
interval.60 In its petition, NERC asserted reliability issues and prohibit entities megawatt losses subject to currently-
from being able to ‘lean’ on the effective Reliability Standard BAL–002–
that an ‘‘integrated and coordinated’’
Interconnection when contingency 1 indicates that concerns about a
suite of set of Reliability Standards
events cause MW losses greater than an
(BAL–001–2, BAL–003–1, TOP–007–0, reliability gap are overstated. According
entity’s MSSC.’’ 65 NERC states that in
EOP–002–3, EOP–011–1, IRO–008–2, to Joint Commenters, of the 95 events
situations involving megawatt losses
and IRO–009–2) will address the involving most severe single
above the most severe single
‘‘complex issues’’ resulting from contingency exceedances from 2012 to
contingency, reliability issues
exceedances of the most severe single 2015, 91 were recovered in less than 15
associated with ACE recovery and
contingency.61 minutes, and there were no
contingency reserve restoration become
Interconnected Reliability Operating
NOPR less important and other reliability
Limit (IROL) exceedances of over 30
48. In the NOPR, the Commission issues ‘‘such as transmission line-
minutes in 2015, ‘‘which demonstrates
expressed concern about the exclusion loading issues or frequency deviations’’
that the grid was secure even while zero
of megawatt losses above a responsible create more immediate reliability threats
ACE was not achieved within 15
entity’s most severe single contingency and warrant priority status.66
minutes.’’ 69
from the scope of Reliability Standard 54. CEA and IESO also oppose
mstockstill on DSK3G9T082PROD with RULES
62 NOPR, 155 FERC ¶ 61,180 at P 33.
BAL–002–2. The Commission 63 Id.
requiring balancing authorities or
questioned the assumption that all such 64 Id. at 34. reserve sharing groups to address
megawatt losses, however small, 65 NERC Comments at 20 (citing Reliability
67 EEI Comments at 11–12.
Standards BAL–001–2, BAL–003–1, EOP–002–3,
60 See NERC Petition, Ex. D (Implementation EOP–011–1, IRO–001–4, TOP–001–3, IRO–008–2, 68 Joint Commenters Comments at 9.
Plan) at 2. and IRO–009–2). 69 Id. at 8 (citing NERC’s 2016 State of Reliability
61 NERC Petition at 15. 66 Id. Report).
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megawatt losses exceeding the most potential impacts of the approach taken standard Requirements R1 and R2,
severe single contingency, which they in Reliability Standard BAL–002–2 which have an approved medium
describe as an ‘‘open-ended when megawatt losses exceed the most violation risk factor, and approved
requirement.’’ 70 CEA explains that it severe single contingency without reliability standards BAL–001–1 and
‘‘can severely affect a [balancing causing an energy emergency. BAL–003–1.74 The conclusory
authority’s] ability to suitably plan for Accordingly, we direct NERC to study statements in NERC’s petition regarding
potential contingency events. At an the reliability risks associated with most the alleged similarities between
increased cost and at the expense of severe single contingency exceedances Requirements R1 and R2 and other
reduced market efficiency (more that do not cause energy emergencies Reliability Standards, the NOPR stated,
capacity is put aside for reserve as and submit a report with findings to the do not adequately explain the alleged
opposed to bidding into the energy Commission two years from Reliability bases for reducing the violation risk
market), a [balancing authority] could, Standard BAL–002–2 implementation. factor for Requirements R1 and R2 from
in theory, design and operate to N–2, the analogous Requirement R3 in the
D. Violation Risk Factor for
N–3 or greater events. However, this is currently-effective Reliability Standard.
Requirements R1 and R2
simply not feasible.’’ 71
NERC Petition Comments
Commission Determination
59. NERC proposed a ‘‘medium’’ 63. NERC, EEI and APS oppose
55. The Commission remains
violation risk factor for each raising the violation risk factor for
concerned with relying on a
requirement of Reliability Standard
‘‘coordinated suite of standards,’’ as Reliability Standard BAL–002–2 to
BAL–002–2.
NERC maintains, to address reliability ‘‘high’’ as proposed in the NOPR. NERC
issues associated with megawatt losses NOPR asserts that a failure to perform
above the most severe single 60. In the NOPR, the Commission Requirements R1 and R2 ‘‘in real time
contingency, considering that these expressed concern that NERC did not would produce results consistent with
other Reliability Standards do not adequately justify lowering the the Commission approved guidelines for
specifically address restoration of ACE assignment of the violation risk factor a ‘Medium’ [violation risk factor] VRF
and Contingency Reserves. Further, the for Requirements R1 and R2 and . . . [that is] unlikely to lead to Bulk
requirements for emergency Operating proposed to direct that NERC assign a Electric System instability, separation,
Plans in Reliability Standard EOP–011– ‘‘high’’ violation risk factor to Reliability or cascading failures.’’ 75 With regard to
1 do not specify any obligation for a Standard BAL–002–2, Requirements R1 Requirement R1, NERC states that
balancing authority, transmission and R2. Reporting ACE ‘‘is not an immediate
system operator, and/or reliability 61. Requirement R1 requires a measure of reliability, and the risk
coordinator to take action to return ACE balancing authority or reserve sharing resulting from failure to meet
to zero for all operating conditions. group to deploy contingency reserves in Requirement R1’’ is not likely to lead to
56. Additionally, Reliability response to all Reportable Balancing instability, separation or cascading
Standards TOP–001–3, EOP–003–2, Contingency Events as the means for failures, the criteria for a high violation
IRO–008–2, and IRO–009–2 pertain to recovering Reporting ACE. Requirement risk factor.76 Likewise, NERC asserts
actions needed to prevent or mitigate R2 requires a balancing authority or that a ‘‘medium’’ violation risk factor is
SOLs/IROLs caused by transmission reserve sharing group to develop, review appropriate for Requirement R2,
line loading and other responsibilities of and maintain a process within its because the process responsible entities
the transmission system operator and Operating Plans for determining its most use for developing and reviewing their
reliability coordinator. These Reliability severe single contingency and to most severe single contingency ‘‘does
Standards do not specifically address prepare to have contingency reserves
the balancing authority’s responsibility not directly contribute to reliability.’’ 77
equal to, or greater than, its most severe EEI agrees, adding that it ‘‘also believes
to recover ACE by balancing load and single contingency. Currently-effective
generation, the purpose of Reliability the medium VRF is justified because in
Reliability Standard BAL–002–1 assigns most instances ACE is more reflective of
Standard BAL–002–2. a ‘‘high’’ violation risk factor for its
57. The Commission finds the commercial issues, particularly if
Requirements R3 and R3.1, which NERC frequency remains normal.’’ 78
arguments and historical data provided explained are analogous to proposed
by commenters to be helpful regarding Requirements R1 and R2 in Reliability 64. APS also disagrees with the NOPR
whether there is a need to expand the Standard BAL–002–2.72 proposal because the Commission
requirements of Reliability Standard 62. In the NOPR, the Commission ‘‘utilizes previous versions of reliability
BAL–002–2 to address most severe stated that NERC provided insufficient standards as a benchmark for the
single contingency exceedances that do support for the proposed violation risk acceptability of VRFs [violation risk
not cause energy emergencies, as factor for Requirements R1 and R2. In factors].’’ 79 APS states that it is
contemplated in the NOPR. justifying the assignment of a ‘‘medium’’ ‘‘concerned that the assignment of a
Nonetheless, we believe the comments violation risk factor NERC asserted, VRF based solely on the previous VRF
do not fully resolve open questions without explanation, that a ‘‘medium’’ assignments may contravene the current
regarding the potential reliability impact violation risk factor is ‘‘consistent with NERC Rules of Procedure and associated
of suspending the focus on the other reliability standards (i.e., BAL– processes.’’ 80 APS recommends that the
balancing of demand and load and ACE 001–2, BAL–003–1).’’ 73 NERC also Commission direct NERC to reevaluate
recovery—the purpose of Reliability contended, without explanation, that
mstockstill on DSK3G9T082PROD with RULES
Standard BAL–002–2—in exceedance Requirement R3 is similar in concept to 74 Id.
scenarios. the current enforceable BAL–001–0.1a 75 NERC Comments at 28.
58. The Commission determines that 76 Id. at 29.
it is important to better understand the 72 NERC Petition, Ex. I (Mapping Document for 77 Id. at 30.
78 EEI at 13.
BAL–002–2).
70 CEA Comments at 5; IESO Comments at 7. 73 NERC Petition, Ex. G (Analysis of Violation 79 APS Comments at 11.
71 CEA Comments at 5–6. Risk Factors and Violation Severity Levels) at 4. 80 Id.
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the VRFs for Reliability Standard BAL– develop, review, and maintain a process use of automated information
002–2 ‘‘against existing guidance.’’ 81 to determine the MSSC and to maintain, techniques. No comments were
for deployment under Requirement R1, received.
Commission Determination
at least enough Contingency Reserve to 71. This final rule approves revisions
65. We adopt the NOPR proposal cover the MSSC . . . [Requirement R2]
regarding the violation risk factor for to Reliability Standard BAL–002–1.
is critical to the implementation of NERC states in its petition that the
Reliability Standard BAL–002–2, proposed Reliability Standard BAL–
Requirements R1 and R2. According to Reliability Standard applies to
002–2.’’ 83 Nonetheless, NERC asserts
the Commission-approved criteria, a balancing authorities and reserve
that Requirement R2 ‘‘does not directly
‘‘high’’ violation risk factor should be sharing groups, and is designed to
contribute to reliability.’’ 84 We disagree,
assigned to a Reliability Standard and conclude that the fundamental ensure that these entities are able to
requirement if violating the requirement connection between Requirements R1 recover from system contingencies by
could ‘‘directly cause or contribute to and R2 creates a significant role in deploying adequate reserves to return
the Bulk Electric System instability, maintaining reliability. their ACE to defined values and by
separation, or a cascading sequence of 68. Accordingly, we direct NERC to replacing the capacity and energy lost
failures, or could place the Bulk Electric assign a ‘‘high’’ violation risk factor to due to generation or transmission
System at an unacceptable risk of Reliability Standard BAL–002–2, equipment outages. The Commission
instability, separation or cascading Requirements R1 and R2. also approves NERC’s seven new
failures.’’ Reliability Standard BAL– definitions and one proposed revised
002–2, Requirement R1 requires V. Information Collection Statement definition, and the retirement of
responsible entities to recover Reporting 69. The Office of Management and currently-effective Reliability Standard
ACE following the occurrence of a Budget (OMB) regulations require that BAL–002–1 immediately prior to the
Reportable Balancing Contingency OMB approve certain reporting and effective date of BAL–002–2.
Event, which supports Interconnection recordkeeping (collections of
72. Public Reporting Burden: Our
frequency in real-time. information) imposed by an agency.85
estimate below regarding the number of
66. We disagree with NERC that Upon approval of a collection(s) of
respondents is based on the NERC
significant real-time differences between information, OMB will assign an OMB
actual and scheduled interchange, the control number and expiration date. Compliance Registry as of April 15,
imbalance that Requirement R1 is Respondents subject to the filing 2016. According to the NERC
intended to address, do not fall within requirements of this rule will not be Compliance Registry, there are 70
the scope of the criterion for a ‘‘high’’ penalized for failing to respond to these balancing authorities in the Eastern
violation risk factor. The need for the collections of information unless the Interconnection, 34 balancing
bulk electric system to stabilize after collections of information display a authorities in the Western
changes in system frequency is critical valid OMB control number. Interconnection and one balancing
for real-time system operations. NERC 70. The Commission is submitting authority in the Electric Reliability
asserts that the status of Reporting ACE these reporting and recordkeeping Council of Texas (ERCOT). The
‘‘is not indicative of an immediate requirements to OMB for its review and Commission bases individual burden
vulnerability.’’ 82 We disagree. A approval under section 3507(d) of the estimates on the time needed for
violation of Requirement R1 jeopardizes Paperwork Reduction Act of 1995, 44 balancing authorities and reserve
system frequency, because it places the U.S.C. 3507(d) (2012). The NOPR sharing groups to maintain, annually,
bulk electric system in a weakened solicited comments on the the operating process and operating
operating condition with heightened Commission’s need for this information, plan that are required in the Reliability
risks of instability, separation, or whether the information will have Standard. These burden estimates are
cascading failures that could result from practical utility, the accuracy of the consistent with estimates for similar
a second contingency. provided burden estimate, ways to tasks in other Commission-approved
67. With regard to Requirement R2, enhance the quality, utility, and clarity Reliability Standards. The following
NERC acknowledges that actions under of the information to be collected, and estimates relate to the requirements for
Requirement R2 ‘‘support Requirement any suggested methods for minimizing this final rule in Docket No. RM16–7–
R1 by requiring responsible entities to the respondent’s burden, including the 000.
RM16–7–000
[BAL–002–2: Disturbance Control Standard—Contingency Reserve for recovery from a Balancing Contingency Event] 86
Annual Average Total annual Cost per
Number of number of Total number burden hours burden hours respondent
respondents responses per of responses and cost per and total ($)
respondent response 87 annual cost
(1) (2) (1)*(2) = (3) (4) (3)*(4) = (5) (5)÷(1)
BA/RSG: 88 Develop and Maintain annually,
Operating Process and Operating Plans ... 105 1 105 8 840 $774
$774 $81,262
mstockstill on DSK3G9T082PROD with RULES
81 Id. 86 Reliability Standard BAL–002–2 applies to 87 The estimated hourly cost (salary plus benefits)
82 NERC Comments at 29. balancing authorities and reserve sharing groups. of $96.71 is an average based on Bureau of Labor
83 Id. at 29. However, the burden associated with the balancing Statistics (BLS) information (http://www.bls.gov/
84 Id. at 30.
authorities complying with Requirements R1and R3 oes/current/naics2_22.htm) for an electrical
is not included within this table because the engineer ($64.29/hour) and a lawyer ($129.12).
85 5 CFR 1320.11.
Commission accounted for it under Commission- 88 BA = Balancing Authority; RSG = Reserve
approved Reliability Standard BAL–002–1. Sharing Group.
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![Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Rules and Regulations 9003
RM16–7–000—Continued
[BAL–002–2: Disturbance Control Standard—Contingency Reserve for recovery from a Balancing Contingency Event] 86
Annual Average Total annual Cost per
Number of number of Total number burden hours burden hours respondent
respondents responses per of responses and cost per and total ($)
respondent response 87 annual cost
(1) (2) (1)*(2) = (3) (4) (3)*(4) = (5) (5)÷(1)
BA/RSG: Record Retention 89 ....................... 105 1 105 4 420 112
$112 $11,760
Total ........................................................ ........................ ........................ 210 ........................ 1,260 886
$93,022
Title: FERC–725R, Mandatory Commission’s expectation for are small business entities.94 Of these,
Reliability Standard BAL–002–2. generation and demand balance the Commission estimates that
Action: Collection of Information. throughout the Eastern and Western approximately five percent, or one of
OMB Control No.: 1902–0268. Interconnections as well as within the these 23 small entities, will be affected
Respondents: Businesses or other for- ERCOT Region. by the new requirements of the
profit institutions; not-for-profit 73. Interested persons may obtain Reliability Standard.
institutions. information on the reporting 76. The Commission estimates that
Frequency of Responses: On requirements by contacting the the small entities affected by Reliability
Occasion. following: Federal Energy Regulatory Standard BAL–002–2 will incur an
Necessity of the Information: This Commission, 888 First Street NE., annual compliance cost of up to $20,355
final rule approves Reliability Standard Washington, DC 20426 [Attention: Ellen (i.e., the cost of developing, and
BAL–002–2, which is designed to
Brown, Office of the Executive Director, maintaining annually operating process
ensure that a responsible entity, either
email: DataClearance@ferc.gov, phone: and operating plans), resulting in a cost
a balancing authority or reserve sharing
(202) 502–8663, fax: (202) 273–0873]. of approximately $885 per balancing
group, is able to recover from system
authority and/or reserve sharing group.
contingencies by deploying adequate VI. Environmental Analysis
These costs represent an estimate of the
reserves to return its ACE to defined 74. The Commission is required to costs a small entity could incur if the
values and replacing the capacity and prepare an Environmental Assessment entity is identified as an applicable
energy lost due to generation or or an Environmental Impact Statement entity. The Commission does not
transmission equipment outages. for any action that may have a consider the estimated cost per small
Reliability Standard BAL–002–2, significant adverse effect on the human
Requirement R1 requires a responsible entity to have a significant economic
environment.90 The Commission has impact on a substantial number of small
entity, either a balancing authority or
categorically excluded certain actions entities. Accordingly, the Commission
reserve sharing group, experiencing a
from this requirement as not having a certifies that this final rule will not have
Reportable Balancing Contingency
significant effect on the human a significant economic impact on a
Event to deploy its contingency reserves
environment. Included in the exclusion substantial number of small entities.
to recover its ACE to certain prescribed
are rules that are clarifying, corrective,
values within the Contingency Event VIII. Document Availability
or procedural or that do not
Recovery Period of 15 minutes.
substantially change the effect of the 77. In addition to publishing the full
Requirement R2 requires a balancing
regulations being amended.91 The text of this document in the Federal
authority or reserve sharing group to
develop, review and maintain a process actions proposed here fall within this Register, the Commission provides all
within its Operating Plans for categorical exclusion in the interested persons an opportunity to
determining its most severe single Commission’s regulations. view and/or print the contents of this
contingency and prepare to have document via the Internet through the
VII. Regulatory Flexibility Act
contingency reserves equal to, or greater Commission’s Home Page (http://
75. The Regulatory Flexibility Act of www.ferc.gov) and in the Commission’s
than, its most severe single contingency.
1980 (RFA) 92 generally requires a Public Reference Room during normal
Requirement R3 provides that, following
description and analysis of final rules business hours (8:30 a.m. to 5 p.m.
a Reportable Balancing Contingency
that will have significant economic Eastern time) at 888 First Street NE.,
Event, the responsible entity shall
restore its Contingency Reserve to at impact on a substantial number of small Room 2A, Washington, DC 20426.
least its most severe single contingency, entities. As shown in the information 78. From the Commission’s Home
before the end of the Contingency collection section, the Reliability Page on the Internet, this information is
Reserve Restoration Period of 90 Standard applies to 105 entities. available on eLibrary. The full text of
minutes. Comparison of the applicable entities
Internal Review: The Commission with the Commission’s small business 94 The Small Business Administration sets the
reviewed the Reliability Standard and data indicates that approximately 23 93 threshold for what constitutes a small business.
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Public utilities may fall under one of several
has determined that it is necessary to different categories, each with a size threshold
90 Regulations Implementing the National
implement section 215 of the FPA. The Environmental Policy Act of 1969, Order No. 486,
based on the company’s number of employees,
requirements of Reliability Standard including affiliates, the parent company, and
FERC Stats. & Regs. ¶ 30,783 (1987). subsidiaries. For the analysis in this final rule, we
BAL–002–2 should conform to the 91 18 CFR 380.4(a)(2)(ii).
are using a 500 employee threshold for each
92 5 U.S.C. 601–612.
affected entity. Each entity is classified as Electric
89 $28/hour, based on a Commission staff study of 93 21.73 percent of the total number of affected Bulk Power Transmission and Control (NAICS code
record retention burden cost. entities. 221121).
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![9004 Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Rules and Regulations
this document is available on eLibrary or the Public Reference Room at (202) as defined in section 351 of the Small
in PDF and Microsoft Word format for 502–8371, TTY (202) 502–8659. Email Business Regulatory Enforcement
viewing, printing, and/or downloading. the Public Reference Room at Fairness Act of 1996.
To access this document in eLibrary, public.referenceroom@ferc.gov.
By the Commission.
type the docket number of this
IX. Effective Date and Congressional Issued: January 19, 2017.
document, excluding the last three
digits, in the docket number field. Notification Nathaniel J. Davis, Sr.,
79. User assistance is available for 80. These regulations are effective Deputy Secretary.
eLibrary and the Commission’s Web site April 3, 2017. The Commission has
during normal business hours from the determined, with the concurrence of the Note: The following appendix will not
Commission’s Online Support at (202) Administrator of the Office of appear in the Code of Federal Regulations.
502–6652 (toll free at 1–866–208–3676) Information and Regulatory Affairs of
or email at ferconlinesupport@ferc.gov, OMB, that this rule is not a ‘‘major rule’’ Appendix—Commenters
Abbreviation Commenter
APS ...................................... Arizona Public Service Company.
BPA ...................................... Bonneville Power Administration.
CEA ...................................... Canadian Electricity Association.
EEI ........................................ Edison Electric Institute.
Idaho Power ......................... Idaho Power.
IESO ..................................... Independent Electricity System Operator.
Joint Commenters ................ Alberta Electric System Operator, California Independent System Operator, Electric Reliability Council of Texas,
Inc., Midcontinent Independent System Operator, Inc., PJM Interconnection, L.L.C., Southwest Power Pool,
Inc., and IESO.
Naturener ............................. Naturener USA, LLC.
NERC ................................... North American Electric Reliability Corporation.
NRECA ................................. National Rural Electric Cooperative Association.
TVA ...................................... Tennessee Valley Authority.
[FR Doc. 2017–02175 Filed 2–1–17; 8:45 am] own volition or upon request by information is referred to herein as
BILLING CODE 6717–01–P authors, claimants, or their authorized ‘‘requested PII.’’
representatives. Second, the Office does not request,
DATES: Effective March 6, 2017.
but sometimes receives, additional PII
LIBRARY OF CONGRESS that applicants include in their
FOR FURTHER INFORMATION CONTACT:
registration applications, such as
Cindy Abramson, Assistant General driver’s license numbers, social security
Copyright Office
Counsel, by email at ciab@loc.gov, or numbers, banking information, and
Abioye Mosheim, Attorney Advisor, by credit card information on their
37 CFR Parts 201 and 204
email at abmo@loc.gov. Each can be registration applications. Such
[Docket No. 2016–7] reached by telephone by calling 202– information is extraneous and
707–8350. unnecessary for the processing and
Removal of Personally Identifiable SUPPLEMENTARY INFORMATION:
Information From Registration Records maintenance of copyright registration
I. Background records. This information is referred to
AGENCY: U.S. Copyright Office, Library herein as ‘‘extraneous PII.’’
of Congress. On September 15, 2016, the Copyright With respect to requested PII—
Office published a notice of proposed information that the Copyright Office
ACTION: Final rule.
rulemaking (‘‘NPRM’’) to create purposely collects as part of
SUMMARY: The U.S. Copyright Office is procedures to request removal of certain registration—the Copyright Act imposes
issuing a final rule to allow authors and ‘‘personally identifiable information’’ certain obligations on the Office to
claimants to replace or remove (‘‘PII’’) from the Office’s registration preserve that information as part of the
personally identifiable information records.1 PII is generally considered to public record. The Act requires the
(‘‘PII’’) from the Office’s online be any information that has the Register to ensure that ‘‘records of . . .
registration catalog. This rule allows potential to identify a specific registrations . . . are maintained, and
authors and claimants, or their individual. The NPRM concerned two that indexes of such records are
authorized representatives, to request distinct categories of PII. prepared,’’ and that ‘‘[s]uch records and
the replacement or removal of certain First, the Office requests and receives indexes . . . be open to public
PII that is requested by the Office and certain types of PII during the inspection,’’ thus creating a public
collected on a registration application, registration process (e.g., dates of birth, record. 17 U.S.C. 705(a), 705(b). The
such as a home addresses or personal addresses, telephone numbers, fax public record of copyright registrations
phone numbers, from the Office’s numbers, and email addresses). The serves several important functions.
internet-accessible public catalog, while collection of some of that information is Chief among these is that the record
mstockstill on DSK3G9T082PROD with RULES
retaining that information in the Office’s mandated by statute or regulation; other
offline records as required by law. The information is optional.2 This domicile of the author(s); and date(s) of death for
rule also codifies an existing practice deceased author(s). See 17 U.S.C. 409. The Act also
1 81FR 63440 (Sept. 15, 2006).
that removes extraneous PII, such as gives the Register of Copyrights the authority to
2 TheCopyright Act requires the Office to gather require applicants to supply any other information
driver’s license numbers, social security the name and address of the copyright claimant; the ‘‘bearing upon the preparation or identification of
numbers, banking information, and name of the author(s), for works that are not the work or the existence, ownership, or duration
credit card information, on the Office’s anonymous or pseudonymous; the nationality or of copyright.’’ Id.
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Document Created: 2017-02-02 00:55:15
Document Modified: 2017-02-02 00:55:15
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This rule is effective April 3, 2017. | |
| Contact | Enakpodia Agbedia (Technical Information), Office of Electric Reliability, Division of Reliability Standards, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-6750, [email protected] | |
| FR Citation | 82 FR 8994 |
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